This paper studies horizontal mergers in vertically related markets. In a two-level Cournot model, with an intermediate and a final market, we show that downstream mergers inducing size effects are, ceteris paribus, more profitable than upstream ones. Moreover, a merger at one level reduces the...

This article attempts to determine the optimal antitrust policy against price-fixing when competition authorities imperfectly observe firms' behaviour. By investigating or auditing on markets, authorities can detect collusion. We show that the strenght of investigations depends on the...