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Cost and Benefits of Merger Control: An Applied Game Theoretic Perspective

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  • Bas Postema
  • Marie Goppelsroeder
  • Peter AG van Bergeijk

Abstract

This paper discusses how simulation models based on game‐theoretic foundations can be used to arrive at an estimate of the net benefits of the merger control legislation. We illustrate our method using the Dutch new merger control legislation that was introduced in 1998. We analyse the effects of proposed mergers in four markets where 26 firms are operating and use a sample period of 5 years. Based on the results of these cases and using a cost benefit analysis, we estimate the net benefits of Dutch merger control at about a little more than €100 million a year during the first five years of merger control in The Netherlands.

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  • Bas Postema & Marie Goppelsroeder & Peter AG van Bergeijk, 2006. "Cost and Benefits of Merger Control: An Applied Game Theoretic Perspective," Kyklos, Wiley Blackwell, vol. 59(1), pages 85-98, February.
    • Handle: RePEc:bla:kyklos:v:59:y:2006:i:1:p:85-98
    DOI: 10.1111/j.1467-6435.2006.00321.x
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    References listed on IDEAS

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    1. Peter A.G. van Bergeijk & Robert C.G. Haffner, 1996. "Privatization, Deregulation and the Macroeconomy," Books, Edward Elgar Publishing, number 905.
    2. Oecd, 2005. "The Benefits of Liberalising Product Markets and Reducing Barriers to International Trade and Investment in the OECD," OECD Economics Department Working Papers 463, OECD Publishing.
    3. Oecd, 2005. "The Benefits of Liberalising Product Markets and Reducing Barriers to International Trade and Investment: The Case of the United States and the European Union," OECD Economics Department Working Papers 432, OECD Publishing.
    4. Peter A.G. van Bergeijk & Erik Kloosterhuis (ed.), 2005. "Modelling European Mergers," Books, Edward Elgar Publishing, number 3803.
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    Cited by:

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    2. Hüschelrath, Kai, 2008. "Is it Worth all the Trouble? The Costs and Benefits of Antitrust Enforcement," ZEW Discussion Papers 08-107, ZEW - Leibniz Centre for European Economic Research.

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