Premium
SOME EMPIRICAL EVIDENCE ON THE EFFECTIVENESS OF ANTIMERGER RELIEF IN THE UNITED STATES
Author(s) -
Kouliavtsev Mikhail S.
Publication year - 2005
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/cbi025
Subject(s) - divestment , agency (philosophy) , economics , settlement (finance) , outcome (game theory) , merger guidelines , government (linguistics) , franchise , microeconomics , public economics , industrial organization , business , finance , marketing , philosophy , linguistics , commission , epistemology , payment
The extent of structural relief obtained by the government in a Section 7 settlement is modeled as an outcome of a bargaining game between the antitrust agency and parties to the merger. This framework is applied to data from 73 Section 7 cases settled during 1990–2000. The fraction of competitive overlap subject to divestiture is shown to depend on the extent of merger‐specific efficiencies, the anticompetitive potential of the merger, and the hostage effect facing the merging firms, as well as the degree of media coverage of the case, the workload of the agency, and the partisan composition of Congress.(JEL L44 , C24 )