|
Internal versus external growth in industries with scale economies: A computational model of optimal merger policy
Mermelstein, Ben
;
Nocke, Volker
;
Satterthwaite, Mark A.
;
Whinston, Michael D.
![[img]](https://madoc.bib.uni-mannheim.de/style/images/fileicons/application_pdf.png)  Preview |
|
PDF
Mermelstein,_Nocke,_Satterthwaite,_Whinston_14-10.pdf
- Published
Download (1MB)
|
|
URL:
|
https://madoc.bib.uni-mannheim.de/35958
|
|
URN:
|
urn:nbn:de:bsz:180-madoc-359587
|
|
Document Type:
|
Working paper
|
|
Year of publication:
|
2014
|
|
The title of a journal, publication series:
|
Working Paper Series
|
|
Volume:
|
14-10
|
|
Place of publication:
|
Mannheim
|
|
Publication language:
|
English
|
|
Institution:
|
School of Law and Economics > VWL, Mikroökonomik (Nocke 2009-)
|
|
MADOC publication series:
|
Department of Economics > Working Paper Series
|
|
Subject:
|
330 Economics
|
|
Classification:
|
JEL:
L41 , L13,
|
|
Keywords (English):
|
Merger Policy , Antitrust , Investment , Entry , Commitment
|
|
Abstract:
|
We study optimal merger policy in a dynamic model in which the presence of scale
economies implies that firms can reduce costs through either internal investment in build-
ing capital or through mergers. The model, which we solve computationally, allows firms
to invest or propose mergers according to the relative profitability of these strategies. An
antitrust authority is able to block mergers at some cost. We examine the optimal policy
when the antitrust authority can commit to a policy rule and when it cannot commit, and
consider both consumer value and aggregate value as possible objectives of the antitrust
authority. We find that optimal policy can differ substantially from what would be best
considering only welfare in the period the merger is proposed. We also find that the abil-
ity to commit can lead to a significant welfare improvement. In general, antitrust policy
can greatly affect firms` optimal investment behavior, and firms` investment behavior can
in turn greatly affect the antitrust authority`s optimal policy.
|
 | Dieser Eintrag ist Teil der Universitätsbibliographie. |
 | Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt. |
 Search Authors in
BASE:
Mermelstein, Ben
;
Nocke, Volker
;
Satterthwaite, Mark A.
;
Whinston, Michael D.
Google Scholar:
Mermelstein, Ben
;
Nocke, Volker
;
Satterthwaite, Mark A.
;
Whinston, Michael D.
ORCID:
Mermelstein, Ben, Nocke, Volker  ORCID: https://orcid.org/0000-0002-5000-6828, Satterthwaite, Mark A. and Whinston, Michael D.
You have found an error? Please let us know about your desired correction here: E-Mail
Actions (login required)
 |
Show item |
|
|
