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A Note on Complementary Goods Mergers between Oligopolists with Market Power: Cournot Effects, Bundling and Antitrust

Author

Listed:
  • Masson Robert T.

    (Cornell University, Ithaca, New York 14853, USA)

  • Dalkir Serdar

    (Micra Inc., 1155 Connecticut Ave. NW, Ste. 900, Washington, DC 20036, USA)

  • Eisenstadt David

    (Micra Inc., 1155 Connecticut Ave. NW, Ste. 900, Washington, DC 20036, USA)

Abstract

Antitrust policy in the US and EU toward non-horizontal mergers between oligopolists is based on a strong presumption of Cournot effects and/or improvements in consumer welfare through post-merger bundling. We show that complementary goods mergers between firms that possess market power in their respective components markets do not always assure either. The analysis underscores the importance of fully specifying the nature of pre-merger rivalry among all market participants and the assumed distribution of consumer preferences when making predictions about the likely effects of such transactions.

Suggested Citation

  • Masson Robert T. & Dalkir Serdar & Eisenstadt David, 2014. "A Note on Complementary Goods Mergers between Oligopolists with Market Power: Cournot Effects, Bundling and Antitrust," Review of Law & Economics, De Gruyter, vol. 10(1), pages 59-79, March.
    • Handle: RePEc:bpj:rlecon:v:10:y:2014:i:1:p:21:n:3
    DOI: 10.1515/rle-2013-0014
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    References listed on IDEAS

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    Cited by:

    1. Kadner-Graziano, Alessandro, 2022. "Mergers of Complements: On the Absence of Consumer Benefits," VfS Annual Conference 2022 (Basel): Big Data in Economics 264127, Verein für Socialpolitik / German Economic Association.

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