The effects of remedies on merger activity in oligopoly

Markus Dertwinkel-Kalt () and Christian Wey

No 81, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: We analyze the effects of structural remedies on merger activity in a Cournot oligopoly when the antitrust agency applies a consumer surplus standard. Remedies increase the scope for pro table and acceptable mergers, while divestitures to an entrant rm are most effective in this regard. Remedial divestitures are most attractive from a social welfare point of view, when the merging parties can extract the entire gains associated with the asset sale. We also show that the merging parties have strong incentives to search for the most efficient buyer. Finally, we identify instances so that a remedy rule induces strictly price-decreasing mergers.

Keywords: Remedies; Divestiture; Merger Control; Oligopoly; Synergies (search for similar items in EconPapers)
JEL-codes: K21 L13 L41 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-bec and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Working Paper: The Effects of Remedies on Merger Activity in Oligopoly (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:81

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