Assessment of Post-merger Coordinated Effects: Characterization by Simulations

Ivaldi, Marc and Lagos, Vicente (2017) Assessment of Post-merger Coordinated Effects: Characterization by Simulations. International Journal of Industrial Organization, 53. pp. 267-305.

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Official URL: http://tse-fr.eu/pub/30813


This paper aims to evaluate the coordinated effects of horizontal mergers by simulating its impact on firms’ critical discount factors. The simulation setting considers a model with a random coefficient discrete choice demand and heterogeneous price-setting firms on the supply side. The results suggest that mergers strengthen the incentives to collude among merging parties, but weaken the incentives of non-merging parties. In addition, while the magnitude of this impact is moderate for the latter, it can be substantial for merging parties. Finally, general policy lessons regarding the assessment of the magnitude of these effects can be drawn from the results.

Item Type: Article
Language: English
Date: 2017
Refereed: Yes
Uncontrolled Keywords: Assessment - Collusion - Coordinated effects - Critical Discount Factor - Merger Simulation
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 15 Sep 2016 07:48
Last Modified: 10 Apr 2018 12:24
OAI ID: oai:tse-fr.eu:30813
URI: http://publications.ut-capitole.fr/id/eprint/22366

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