To merge or not to merge: That is the question

In this paper we analyze the implementation of socially optimal mergers when the regulator is not informed about all parameters that determine social and private gains from potential mergers. We show that implementation requires a certain degree of agreement between social and private incentives. Th...

Full description

Saved in:
Bibliographic Details
Published in:Review of economic design 2004-12, Vol.9 (1), p.11-30
Main Authors: Corch n, Luis C., Fauli-Oller, Ramon
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Antitrust
Cost control
Duopoly
Savings
Social goals
Social impact
Studies
Uncertainty
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In this paper we analyze the implementation of socially optimal mergers when the regulator is not informed about all parameters that determine social and private gains from potential mergers. We show that implementation requires a certain degree of agreement between social and private incentives. The most important example where this congruence is present is when the uncertainty refers to cost savings, because in this case society and firms want costs savings to be as high as possible. Then, it is possible to induce firms to truthfully reveal the costs savings induced by the merger. [PUBLICATION ABSTRACT]
ISSN:1434-4742
1434-4750
DOI:10.1007/s10058-004-0117-3