The effects of remedies on merger activity in oligopoly
Markus Dertwinkel-Kalt () and
Christian Wey ()
No 81, DICE Discussion Papers from University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
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: L13 L41 K21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec and nep-ind
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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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