Premium
QUANTIFYING THE SCOPE FOR EFFICIENCY DEFENSE IN MERGER CONTROL: THE WERDEN‐FROEB‐INDEX *
Author(s) -
GOPPELSROEDER MARIE,
SCHINKEL MAARTEN PIETER,
TUINSTRA JAN
Publication year - 2008
Publication title -
the journal of industrial economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.93
H-Index - 77
eISSN - 1467-6451
pISSN - 0022-1821
DOI - 10.1111/j.1467-6451.2008.00360.x
Subject(s) - index (typography) , complement (music) , scope (computer science) , merger control , econometrics , economics , operations research , computer science , statistics , mathematics , finance , chemistry , biochemistry , commission , complementation , world wide web , programming language , gene , phenotype
This paper introduces the Werden‐Froeb Index (WFI) to assist in evaluating merger‐specific efficiencies in horizontal mergers. The index measures the weighted average reduction in marginal costs required to restore pre‐merger equilibrium prices and quantities after the (full or partial) merger is consummated. The WFI is well defined, objective and robust, and it has relatively low information requirements. We propose to use the index as a natural complement to concentration measures such as the Hirschmann‐Herfindahl Index in the assessment of horizontal mergers.