Horizontal Merger Analysis
In: Harvard Law School John M. Olin Center Discussion Paper No. 1049 (2020)
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In: Harvard Law School John M. Olin Center Discussion Paper No. 1049 (2020)
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Working paper
Over the past forty years, there has been a remarkable transformation in horizontal merger enforcement in the United States. With no change in the underlying statute, the Clayton Act, there has been a dramatic decline in the weight given to market concentration by the federal courts and by the federal antitrust agencies. Increasing weight has been given to three arguments often made by merging firms in their defense: entry, expansion and efficiencies. We document this dramatic shift and provide examples where courts have approved highly concentrating mergers based on limited evidence of entry and expansion. We show using merger enforcement data and a survey we conducted of merger practitioners that the decline in antitrust enforcement is ongoing, especially at the current Justice Department. We then argue in favor of reinvigorating horizontal merger enforcement by partially restoring the structural presumption and by requiring strong evidence to overcome the government's prima facie case. We propose several routes by which the government can establish its prima facie case, distinguishing between cases involving coordinated vs. unilateral anti-competitive effects.
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In: Journal of Antitrust Enforcement, 2020; 16 (2): 220–261
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In: Institute for New Economic Thinking Working Paper Series No. 212
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In: The Manchester School, Volume 78, Issue 5, p. 379-394
In: CESifo working paper series 4996
In: Industrial organisation
We show that the presence of a strategic tax policy increases the incentive for a horizontal merger compared to the situation with no tax policy. Thus, we point towards a new factor, viz., strategic tax policy, for increasing the incentive for a horizontal merger that has been ignored in the existing literature. In contrast to the usual belief, we also show that a horizontal merger may benefit the consumers and the society.
In: The Antitrust bulletin: the journal of American and foreign antitrust and trade regulation, Volume 63, Issue 4, p. 444-454
ISSN: 1930-7969
This article examines how capacity constraints affect horizontal mergers. Binding capacity constraints for merging firms may mitigate merger price effects, but capacity constraints for nonmerging firms may either amplify or mitigate such effects. The presence of capacity constraints for both the merging and nonmerging firms in a market further complicates the analysis of merger price effects. Capacity constraints may also confound the relationship between market concentration and merger price effects. In addition, capacity constraints affect market definition analysis and analytical tools such as merger simulation and upward pricing pressure indexes. Analyzing the effects of capacity constraints on mergers continues to be a challenge for merger reviews.
In: Journal of economics
ISSN: 1617-7134
AbstractWe show that the implications of a merger on collusion sustainability change significantly from the extant literature if merger is not profitable in the punishment subgame where firms play non-cooperative Cournot–Nash game. Merger either does not affect collusion sustainability or it may decrease or increase collusion sustainability, depending on the output allocation for the merged firm. Our paper has the following implication for antitrust policies. If merger is observed, the authority will expect an industry-wide collusion, since merger will occur in our analysis provided it increases collusion sustainability.
In: Peace research abstracts journal, Volume 44, Issue 2, p. 369-373
ISSN: 0031-3599
In: CESifo Working Paper Series No. 4996
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Working paper
In: Review of Industrial Organization, 2011
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In: Antitrust, Volume 36, Issue 2
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In: Andreas Reindl, The new US horizontal merger guidelines: International divergence in merger review?, December 2010, Concurrences N° 4-2010, Art. N° 32961, https://www.concurrences.com/en/review/issues/no-4-2010/foreword/the-new-us-horizontal-merger-guidelines-international-divergence-in-merger-32961
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In: Antitrust Magazine, Spring 2022 (forthcoming)
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