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Early Settlement in E uropean Merger Control
Author(s) -
Garrod Luke,
Lyons Bruce
Publication year - 2016
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/joie.12093
Subject(s) - commission , settlement (finance) , agency (philosophy) , merger control , control (management) , economics , intervention (counseling) , sample (material) , public economics , business , finance , sociology , management , psychology , social science , chemistry , chromatography , psychiatry , payment
We analyse the determinants of early settlement between merging parties and the E uropean Commission over remedies that remove concerns of anticompetitive effects. This extends the previously narrow range of econometric literature on early settlement. Consistent with the theory of early settlement, our results confirm the importance of delay costs and of uncertainty, measured by the complexity of the economic analysis required for each merger. We also find a non‐monotonic effect of agency resourcing, which raises questions about the Commission's efficiency in times of high case load. Econometrically, we select a sample of merger decisions in which the E uropean Commission intervened due to concerns of anticompetitive effects, and our selection model provides estimates of the factors determining intervention by the Commission. Conclusions are drawn for public policy.