Merger remedies in oligopoly under a consumer welfare standard

Markus Dertwinkel-Kalt (markus.dertwinkel-kalt@wiwi.uni-muenster.de) and Christian Wey

No 187, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We analyze the welfare effects of structural remedies on merger activity in a Cournot oligopoly if the antitrust agency applies a consumer surplus standard. We derive conditions such that otherwise price-increasing mergers become externality-free by the use of remedial divestitures. In this case, the consumer surplus standard ensures that mergers are only implemented if they increase social welfare. If the merging parties can extract the entire surplus from the asset sale, then the socially optimal buyer will be selected under a consumer standard.

Keywords: Remedies; Merger control; Consumer standard; Synergies (search for similar items in EconPapers)
JEL-codes: K21 L13 L41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-ind and nep-law
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Merger Remedies in Oligopoly under a Consumer Welfare Standard (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:187

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