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Author: Stephen Polasky Publisher: ISBN: Category : Languages : en Pages :
Book Description
We use a two-period model to analyze the short run and long run profitability and welfare consequences of horizontal mergers, where the equilibrium responses to a merger can differ over time. Although firms can anticipate the merger, they can only adjust their capacity in the long run.We find a greater range of profitable mergers than in static models. For a merger to raise welfare, it is sufficient that the short run welfare effects are positive and necessary that the long run effects are positive.We relate these conditions to the inside firms? market shares and the Herfindahl index.
Author: Stephen Polasky Publisher: ISBN: Category : Languages : en Pages :
Book Description
We use a two-period model to analyze the short run and long run profitability and welfare consequences of horizontal mergers, where the equilibrium responses to a merger can differ over time. Although firms can anticipate the merger, they can only adjust their capacity in the long run.We find a greater range of profitable mergers than in static models. For a merger to raise welfare, it is sufficient that the short run welfare effects are positive and necessary that the long run effects are positive.We relate these conditions to the inside firms? market shares and the Herfindahl index.
Author: John W. Mayo Publisher: ISBN: Category : Languages : en Pages : 36
Book Description
This paper extends Williamson's (1968) classic framework of the welfare effect of mergers to the case of vertical mergers, and in particular to those in which the imposition of merger conditions (remedies) may allow an otherwise anticompetitive merger to proceed. While similarities to the case of horizontal mergers without a remedies option are present, differences also arise. Most notably, for prototypical vertical mergers remedies may yield post-merger economic welfare which is higher than pre-merger levels. This suggests that remedies directed toward vertical mergers hold the promise of a more beneficial approach than in the case of horizontal mergers. This finding leads to an examination of merger remedies policy and practice. We find that antitrust enforcers historically have implicitly recognized both the economic welfare framework and the more robust role for remedies in vertical merger cases, particularly through the application of remedies aimed at preventing identified anticompetitive conduct while facilitating merger-related efficiencies. The 2020 Vertical Merger Guidelines illuminate the basis for the U.S. antitrust agencies' substantive analysis of vertical mergers, but do not address remedies. This paper discusses principles that may be useful in formulating much-needed guidance that would unify, clarify and reinforce the agencies' policies for remedies in vertical merger cases.
Author: Hartmut Egger Publisher: ISBN: Category : Languages : en Pages : 33
Book Description
This paper analyzes the consequences of cross-border mergers in a spatial framework, thereby distinguishing three channels of influence: a price increase due to the elimination of product market competition, an adjustment in plant location which reduces overall transportation cost expenditures, and a harmonization in production costs due to a technology transfer within the firm. The welfare analysis illustrates that larger countries are better off after the merger. By contrast, smaller countries may lose, if the pre-merger production cost differential across firms is negligible and/or a post-merger technology transfer across production sites is infeasible. Furthermore, the analysis provides novel insights into the trade pattern effects of a merger. In this respect, the main result of the paper is that an adjustment of plant location in space can reverse the direction of (net) trade flows.
Author: Margaret Loudermilk Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
We study the welfare impacts of mergers in markets where some firms are already vertically integrated. Our model features logit Bertrand competition downstream and Nash Bargaining upstream. We numerically simulate four merger types: vertical mergers between an unintegrated retailer and an unintegrated wholesaler, downstream “horizontal” mergers between an unintegrated retailer and an integrated retailer/wholesaler, upstream “horizontal” mergers between an unintegrated wholesaler and an integrated retailer/wholesaler, and integrated mergers between two integrated retailer/wholesaler pairs. We find that mergers that have both horizontal and vertical characteristics typically harm consumers. We apply the model to the Republic/Santek merger as a real-world example.
Author: Tina Kao Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
In this paper we consider a model of duopoly with differentiated products to examine the welfare effects of a merger between two asymmetric firms. We find that, for quantity competition, the parameter range for welfare-enhancing merger widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices.
Author: Stephen Polasky
Author: Stephen Polasky
Author: John W. Mayo
Author: Ari David Gerstle
Author: Hartmut Egger
Author: Margaret Loudermilk
Author: Monica Lynne Greer
Author: 
Author: Sven-Olof Fridolfsson
Author: Christian Hott
Author: Tina Kao