We analyze the optimal policy of an antitrust authority towards horizontal mergers when merger proposals are endogenous and firms choose which of several mutually exclusive mergers to propose. The optimal policy of an antitrust authority that seeks to maximize expected consumer surplus involves...

Antitrust laws play a prominent role in the business environment of many nations. Indeed, if one is a regular reader of the New York Times or Wall Street Journal, the chances are good of seeing in any given week at least one, and often several, articles devoted to some aspect of antitrust...

In this chapter, we begin our discussion of antitrust economics by considering what many consider its most central element: its ban on "price fixing" - that is, agreements among competitors over the prices they will charge or the outputs they will produce. Indeed, the prohibition on price fixing...

We study the e.ects of antitrust policy in industries with continual innovation. A more protective antitrust policy may have conflicting e.ects on innovation incentives, raising the profits of new entrants, but lowering those of continuing incumbents. We show that the direction of the net e.ect...

We analyze the optimal dynamic policy of an antitrust authority towards horizontal mergers when merger proposals are endogenous and occur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the characteristics of which...

In this chapter our attention turns to horizontal merger policy. The Sherman Act's prohibition on "contracts, combinations, and conspiracies in restraint of trade," whose application to price fixing we discussed in Chapter 2, also applies to horizontal mergers, but with an important difference:...