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Unilateral effects of partial acquisitions: consistent calculation of GUPPI under horizontal merger guidelines within the EU

Author

Listed:
  • Panagiotis N. Fotis

    (Hellenic Competition Commission)

  • Michael L. Polemis

    (University of Piraeus)

  • Konstantinos Eleftheriou

    (University of Piraeus)

Abstract

We derive a consistent formula of the Gross Upward Pricing Pressure Index (GUPPI) with Council Regulation Horizontal Merger Guidelines (2004) by: (i) expressing the amount of acquired equity stake as a function of the market share of the victim firm and (ii) assuming a logit demand function. The results show that the anti-competitive effects of partial acquisitions are higher in this case than under partial acquisitions with constant equity stakes and that competition authorities should be skeptical when they use traditional screening indicators in order to estimate the unilateral effects of partial acquisitions in Bertrand markets with differentiated products.

Suggested Citation

  • Panagiotis N. Fotis & Michael L. Polemis & Konstantinos Eleftheriou, 2017. "Unilateral effects of partial acquisitions: consistent calculation of GUPPI under horizontal merger guidelines within the EU," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 44(3), pages 315-325, September.
    • Handle: RePEc:spr:epolin:v:44:y:2017:i:3:d:10.1007_s40812-016-0053-6
    DOI: 10.1007/s40812-016-0053-6
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    References listed on IDEAS

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    Cited by:

    1. Cheng, Long & Heywood, John S. & Ye, Guangliang, 2019. "Partial acquisition with an excluded public rival," International Review of Economics & Finance, Elsevier, vol. 59(C), pages 164-173.

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    More about this item

    Keywords

    Partial acquisitions; GUPPI; Logit demand; Merger control; Unilateral effects;
    All these keywords.

    JEL classification:

    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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