The first-order approach in rank-order tournaments is addressed. It is demonstrated that the conditions given in the literature are not sufficient to guarantee concavity of agents' objective functions. Additional conditions are provided that ensure validity of the first-order approach.

According to the Merger Guidelines, the Antitrust Authority has to challenge an anticompetitive merger. These guidelines, however, neglect the parties' litigation costs during trial. We analyze under which circumstances these costs are so high that the agency's intervention is inefficient.