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An equilibrium analysis of efficiency gains from mergers

Dragan Jovanovic and Christian Wey ()

No 64, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We analyze the efficiency defense in merger control. First, we show that the relationship between exogenous efficiency gains and social welfare can be non-monotone. Second, we consider both endogenous mergers and endogenous efficiencies and find that merger proposals are largely aligned with a proper social welfare analysis which explicitly considers the without merger counterfactual. We demonstrate that the merger specificity requirement does not help much to select socially desirable mergers; to the contrary, it may frustrate desirable mergers inducing firms not to claim efficiencies at all.

Keywords: Horizontal Mergers; Efficiency Defense; Merger Specific Efficiencies (search for similar items in EconPapers)
JEL-codes: K21 L13 L41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff and nep-law
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:64

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