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The Sale of Data: Learning Synergies Before M&As

Author

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  • Antoine Dubus

    (D-MTEC - Department of Management, Technology, and Economics [ETH Zürich] - ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich])

  • Patrick Legros

    (ECARES - European Center for Advanced Research in Economics and Statistics - ULB - Université libre de Bruxelles)

Abstract

Firms may share information to discover potential synergies between their data sets and algorithms, eventually leading to more efficient mergers and acquisitions (M&A) decisions. However, information sharing also modifies the competitive balance when companies do not merge, and a firm may be reluctant to share information with potential rivals. Under general conditions, we show that firms benefit from (partially) sharing information. By doing so, they can merge conditionally based on high synergies. Compared to a laissez-faire situation, the presence of a regulator allowing or refusing the M&A may increase or decrease information sharing, with a concomitant increase or decrease in consumer surplus. Hence, regulation can lower the surplus of consumers it is willing to protect. An optimal merger policy combines merger control with mandated data-sharing rules.

Suggested Citation

  • Antoine Dubus & Patrick Legros, 2024. "The Sale of Data: Learning Synergies Before M&As," Working Papers hal-03698203, HAL.
    • Handle: RePEc:hal:wpaper:hal-03698203
    Note: View the original document on HAL open archive server: https://hal.science/hal-03698203v5
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    References listed on IDEAS

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    1. Carl Shapiro, 2019. "Protecting Competition in the American Economy: Merger Control, Tech Titans, Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 69-93, Summer.
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    Cited by:

    1. Tzvetomir Tzanov, 2024. "Super Apps and Synergies Generation – Strategic and Financial Management Implications," Innovative Information Technologies for Economy Digitalization (IITED), University of National and World Economy, Sofia, Bulgaria, issue 1, pages 51-60, October.
    2. Hemant Bhargava & Antoine Dubus & David Ronayne & Shiva Shekhar, 2024. "The Strategic Value of Data Sharing in Interdependent Markets," CESifo Working Paper Series 10963, CESifo.

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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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