Assessing the Consequences of a Horizontal Merger and its Remedies in a Dynamic Environment
نویسندگان
چکیده
This paper estimates a dynamic oligopoly model to assess the economic consequences of a horizontal merger that took place in 1970 to create the second largest global producer of steel. The paper solves a Markov perfect Nash equilibrium for the model and simulates the welfare e¤ects of the horizontal merger. Estimates reveal that the merger enhanced the production e¢ ciency of the merging party by a magnitude of 4.1 %, while the exercise of market power was restrained primarily by the presence of fringe competitors. The merger altered the nature of strategic interaction in investment behavior among rms. Our simulation result also indicates that structural remedies endorsed by the competition authority failed to promote competition.
منابع مشابه
Assessing the Consequence of Horizontal Merger and its Remedies in A Dynamic Environment
This paper estimates a dynamic oligopoly model to assess economic consequence of a horizontal merger, which took place in 1970 to create the second-largest steel producer in the world. The paper solves for a Markov perfect Nash equilibrium of the model and simulates welfare e¤ects of the horizontal merger. Estimates reveal that the merger enhanced production e¢ ciency for the merging party by t...
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