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M&A Advisory and the Merger Review Process

Michele Bisceglia (), Salvatore Piccolo () and Emanuele Tarantino
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Michele Bisceglia: Università di Bergamo
Salvatore Piccolo: Università di Bergamo and CSEF

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: Two firms propose a merger to the antitrust authority. They are uninformed about the efficiencies generated by the merger, but can hire an expert to gather information on their behalf. The authority is also uninformed about the merger's efficiencies, but can run a costly internal investigation to learn them. We analyze the effect of the disclosure of the expert's contract on consumer welfare, and show that consumers are not necessarily better off with disclosure. This negative effect hinges on a free-riding problem between expert and authority in the information acquisition game, and is more relevant in highly competitive industries.

Keywords: Advice; Competition Policy; Mergers; Advisory Contract; Disclosure. (search for similar items in EconPapers)
JEL-codes: D43 L11 L42 L81 (search for similar items in EconPapers)
Date: 2018-11-26
New Economics Papers: this item is included in nep-com, nep-cta, nep-ind, nep-law and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:515

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