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2007•Unpublished venueRequires access

Sequential Merger Review

Volker Nocke, Michael D. Whinston, Incomplete

Open publisher page 8 citations

Abstract

We analyze the optimal dynamic policy of an antitrust authority to-wards horizontal mergers when merger proposals are endogenous and oc-cur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the charac-teristics of which may not yet be known to the antitrust authority. We show that, in many cases, this apparently difficult problem has a simple resolution: an antitrust authority can maximize discounted consumer sur-plus by using a completely myopic merger review policy that approves a merger today if and only if it does not lower consumer surplus given the current market structure. 1

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What this paper is about

We analyze the optimal dynamic policy of an antitrust authority to-wards horizontal mergers when merger proposals are endogenous and oc-cur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the charac-teristics of which may not yet be known to the antitrust authority. We show that, in many cases, this apparently difficult problem has a simple resolution: an antitrust authority can maximize discounted consumer sur-plus by using a completely myopic merger review policy that approves a merger today if and only if it does not lower consumer surplus given the current market structure. 1

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OpenAlex reports 8 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

We analyze the optimal dynamic policy of an antitrust authority to-wards horizontal mergers when merger proposals are endogenous and oc-cur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the charac-teristics of which may not yet be known to the antitrust authority. We show that, in many cases, this apparently difficult problem has a simple resolution: an antitrust authority can maximize discounted consumer sur-plus by using a completely myopic merger review policy that approves a merger today if and only if it does not lower consumer surplus given the current market structure. 1

Key concepts: Merger control, Profitability index, Economic surplus, Consumer welfare, Economics, Microeconomics, Welfare, Business

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