Horizontal mergers Flashcards
1
Q
What was the williamson tradeoff in 1968?
A
A merger can be welfare enhancing if there are sufficient efficiency gains
2
Q
What’re the anticompetitive effects of mergers?
A
- Unilateral effects
- Coordinated effects
- Conglomerate effects
- Vertical effects
3
Q
What’re the common defences for mergers?
A
- Usual line (Low barriers to entry, market defined to narrowly)
- Efficiency defence (Better margins incentivise lower prices)
- Failing firm (One party may exit without merger)
4
Q
What’re the solutions to a merger?
A
- Prohibition (Sainsburys Asda 2018)
- Structural
- Behavioural
5
Q
What’re some problems with merger remedies?
A
- Type 1 too harsh, efficiencies eliminated
- Type 2 too lenient, firms still employ anticompetitive effects
- Investigations may take too long (Sainsburys 2 yrs)
6
Q
What’re the screens for unilateral effects?
A
- European commission market share screen
- US DOJ uses HHI index to screen for potential competitive concerns
7
Q
A
What is interbrand and intrabrand competition?
