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An Analytical Approach for Policy Coordination

In: Handbook of Merger Control and Environmental Policy

Author

Listed:
  • Luis Gautier

    (Universidad de Málaga, Departamento de Teoría e Historia Econòmica)

  • Mahelet G. Fikru

    (Department of Economics, Missouri University of Science and Technology)

Abstract

This chapter introduces a framework for analyzing the cooperative policy setting between the merger control authority (MCA) and environmental protection agency (EPA). Currently, the United States and EU follow a noncooperative policy framework where MCA and EPA independently set policies. The model developed in this chapter identifies inefficiencies associated with noncooperative scenarios. By establishing a cooperative equilibrium, the analysis demonstrates that there exists an industry output level post-merger that maximizes joint welfare when MCA and EPA coordinate their policies. The policy implication suggests a shift toward cooperation between MCA and EPA, emphasizing the potential for welfare gains through aligned decision-making. This cooperative approach would require a reevaluation of the existing noncooperative framework and could lead to more balanced outcomes in terms of economic and environmental welfare.

Suggested Citation

  • Luis Gautier & Mahelet G. Fikru, 2024. "An Analytical Approach for Policy Coordination," Natural Resource Management and Policy, in: Handbook of Merger Control and Environmental Policy, chapter 0, pages 245-251, Springer.
    • Handle: RePEc:spr:nrmchp:978-3-031-63549-6_13
    DOI: 10.1007/978-3-031-63549-6_13
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