This paper analyses the profitability of horizontal mergers in a Stackelberg model and their impact on welfare when there is uncertainty about the marginal costs of the newly merged firms. The authors consider that the merging firms decide their production strategy knowing the actual value of...

Some path-breaking work on mergers takes efficiency gains for granted, or assumes that firms have perfect knowledge when taking merger decisions. In practice, firms and competition authorities cannot know exact future efficiency gains, prior to merger consummation. This paper analyzes horizontal...

This paper offers a theoretical model for the analysis of illegal cartels. Given the nature of the cartel, retaliation is also illegal. To assess the stability of collusion as a criminal organization, we propose a one-shot game based on Bertrand competition with product differentiation. We...

We study the anticompetitive effects of predatory pricing and the efficacy of three policy responses. In a series of experiments where an incumbent and a potential entrant interact, we compare prices, market structures and welfare. Under a laissez-faire regime, the threat of post-entry price...

The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their...

Economists have often viewed the adoption of artificial intelligence (AI) as a standard process innovation where we expect that efficiency will drive adoption in competitive markets. This paper models AI based on recent advances in machine learning that allow firms to engage in better...

If a firm is a nexus of contracts, then it is just the sum of its counterparties. It follows that when a firm monopolizes a particular market and exploits its power to impose unfavorable terms on a counterparty, the firm necessarily exploits one counterparty for the benefit of another, because...