Efficiency Gains and Myopic Antitrust Authority in a Dynamic Merger Game

By Massimo Motta, Helder Vasconcelos. 2005

111 citations recorded by the source corpus.

This Paper models a sequential merger formation game with endogenous efficiency gains in which every merger has to be submitted for approval to the Antitrust Authority (AA). Two different types of AA are studied: first, a myopic AA, which judges a given merger without considering that subsequent mergers may occur; and, second, a forward-looking AA, which anticipates the ultimate market structure a given merger will lead to. By contrasting the decisions of these two types of AA, merger policy implications can be drawn. In particular, the efficiency offence argument does not find any justification under a forward-looking AA.

Subfields: Economics and Econometrics, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3548983787612c862f68a05a12091a51dff9d0b4

Citations in the corpus

• Dynamic Merger Review (2010, unknown): “…would hold when firms have natural merger partners (as we noted earlier) and has been assumed throughout the small existing literature on antitrust review of mergers in dynamic settings (Nilssen and Sorgard 1998; Matsushima 2001; Motta and Vasconcelos 2005), it is clearly a strong assumption.”
• An equilibrium analysis of efficiency gains from mergers (2012, unknown): “4Both practical and economic reasons have been put forward for that observation (see Motta and Vasconcelos, 2005).”