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Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm?

Author

Listed:
  • Stephen Davies

    (Centre for Competition Policy and School of Economics, University of East Anglia)

  • Matthew Olczak

    (Centre for Competition Policy and School of Economics, University of East Anglia)

Abstract

Previous empirical assessments of the effectiveness of structural merger remedies have focused mainly on the subsequent viability of the divested assets. Here, we take a different approach by examining how competitive are the market structures which result from the divestments. We employ a tightly specified sample of markets in which the European Commission (EC) has imposed structural merger remedies. It has two key features: (i) it includes all mergers in which the EC appears to have seriously considered, simultaneously, the possibility of collective dominance, as well as single dominance; (ii) in a previous paper, for the same sample, we estimated a model which proved very successful in predicting the Commission's merger decisions, in terms of the market shares of the leading firms. The former allows us to explore the choices between alternative theories of harm, and the latter provides a yardstick for evaluating whether markets are competitive or not – at least in the eyes of the Commission.

Suggested Citation

  • Stephen Davies & Matthew Olczak, 2008. "Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2008-28, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:ueaccp:2008_28
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    References listed on IDEAS

    as
    1. Patrice Bougette & Stéphane Turolla, 2006. "Merger Remedies at the European Commission: A Multinomial Logit Analysis," Post-Print halshs-00466606, HAL.
    2. Stephen Davies & Bruce Lyons, 2007. "Mergers and Merger Remedies in the EU," Books, Edward Elgar Publishing, number 13008.
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    Cited by:

    1. Peter L. Ormosi, 2009. "Determinants of the success of remedy offers: Evidence from European Community mergers," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2009-11, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    2. Matthew Olczak, 2010. "Unilateral versus Coordinated Effects: Comparing the Impact on Consumer Welfare of Alternative Merger Outcomes," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2010-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    tacit collusion; collective dominance; single dominance; coordinated effects; merger remedies;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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