Mergers on Networks

Andrei Dubovik

MPRA Paper from University Library of Munich, Germany

Abstract: I study mergers where each firm owns multiple shops across a country. Presently, the European Commission views every shop, together with the shops from its catchment area, as an isolated market. Such an approach is internally inconsistent. I show how to extend the European Commission's approach to consistently take overlaps in catchment areas into account. My model is a specialization of the existing network theory that is aimed to be feasible in real merger cases. As a demonstration, I study a past merger case and I find that neglecting overlaps in catchment areas can result in substantial biases.

Keywords: mergers; networks; spatial competition; consumer demand (search for similar items in EconPapers)
JEL-codes: D43 D85 L13 L14 L40 (search for similar items in EconPapers)
Date: 2018-06-09
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:95458

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