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In several European merger cases competition authorities have demanded that the merging firm auctions off virtual … marginal cost. This output is sold in the market in competition with the merging firm. The paper compares sale of physical and …
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We study the interdependency between two markets, where the first involves offering production capacity, while on the second actual production is sold. The key issue is that the expected product market outcome determines the opportunity cost for bidding at the capacity market while the capacity...
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