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Industry Concentration and Welfare - On the Use of Stock Market Evidence from Horizontal Mergers

Fridolfsson, Sven-Olof; Stennek, Johan - C.E.P.R. Discussion Papers - 2006

There is diverging empirical evidence on the competitive effects of horizontal mergers: consumer prices (and thus presumably competitors' profits) often rise while competitors' share prices fall. Our model of endogenous mergers provides a possible reconciliation. It is demonstrated that...

Persistent link: https://www.econbiz.de/10005497962

The Insiders' Dilemma: An Experiment on Merger Formation

Lindqvist, Tobias; Stennek, Johan - C.E.P.R. Discussion Papers - 2005

This paper tests the insiders’ dilemma hypothesis in a laboratory experiment. The insiders’ dilemma means that a profitable merger does not occur, because it is even more profitable for each firm to unilaterally stand as an outsider (Stigler, 1950; Kamien and Zang, 1990 and 1993). The...

Persistent link: https://www.econbiz.de/10005789098

Should Mergers Be Controlled?

Fridolfsson, Sven-Olof; Stennek, Johan - C.E.P.R. Discussion Papers - 2001

Anti-competitive mergers benefit competitors more than the merging firms. We show that such externalities reduce firms' incentives to merge (a hold-up mechanism). Firms delay merger proposals, thereby foregoing valuable profits and hoping other firms will merge instead - a war of attrition. The...

Persistent link: https://www.econbiz.de/10005788894

Mergers as Auctions

Ivaldi, Marc; Motis, Jrissy - C.E.P.R. Discussion Papers - 2007

Most empirical studies that evaluate motives and gains in M&A conclude that acquirers at best do not lose from the deal while targets obtain positive gains. With a database containing merging firms’ characteristics and final bids, we propose a structural approach to infer acquirers’ gains...

Persistent link: https://www.econbiz.de/10005656211

The Effect of EU Antitrust Investigations and Fines on a Firm’s Valuation

Langus, Gregor; Motta, Massimo - C.E.P.R. Discussion Papers - 2007

We estimate, using event study techniques, the impact of the main events in an antitrust investigation on a firm …

Persistent link: https://www.econbiz.de/10005662243

A Simple Theory of Predation

Fumagalli, Chiara; Motta, Massimo - C.E.P.R. Discussion Papers - 2009

We propose a simple theory of predatory pricing, based on scale economies and sequential buyers (or markets). The entrant (or prey) needs to reach a critical scale to be successful. The incumbent (or predator) is ready to make losses on earlier buyers so as to deprive the prey of the scale it...

Persistent link: https://www.econbiz.de/10004973970

Internal versus External Growth in Industries with Scale Economies: A Computational Model of Optimal Merger Policy

Mermelstein, Ben; Nocke, Volker; Satterthwaite, Mark; … - C.E.P.R. Discussion Papers - 2014

computationally, allows firms to invest or propose mergers according to the relative profitability of these strategies. An antitrust … authority is able to block mergers at some cost. We examine the optimal policy when the antitrust authority can commit to a … antitrust authority. We find that optimal policy can differ substantially from what would be best considering only welfare in …

Persistent link: https://www.econbiz.de/10011084004

Anatomy of Cartel Contracts

Hyytinen, Ari; Steen, Frode; Toivanen, Otto - C.E.P.R. Discussion Papers - 2013

We study cartel contracts using data on 18 contract clauses of 109 legal Finnish manufacturing cartels. One third of the clauses relate to raising profits; the others deal with instability through incentive compatibility, cartel organization, or external threats. Cartels use three main...

Persistent link: https://www.econbiz.de/10011084010

Measuring Unilateral Effects in Partial Acquisitions

Brito, Duarte; Ribeiro, Ricardo; Vasconcelos, Helder - C.E.P.R. Discussion Papers - 2013

Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive effects of partial acquisitions. We propose an empirical structural methodology to examine quantitatively the unilateral impact of partial acquisitions involving pure financial interests...

Persistent link: https://www.econbiz.de/10011084091

Quantifying the Coordinated Effects of Partial Horizontal Acquisitions

Brito, Duarte; Ribeiro, Ricardo; Vasconcelos, Helder - C.E.P.R. Discussion Papers - 2013

The growth of private-equity investment strategies in which firms often hold partial ownership interests in competing firms has led competition agencies to take an increased interest in assessing the competitive effects of partial horizontal acquisitions. We propose a methodology to evaluate the...

Persistent link: https://www.econbiz.de/10011084532