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Review of Economic Design

, Volume 9, Issue 1, pp 11–30 | Cite as

To merge or not to merge: That is the question

  • Luis C. CorchónEmail author
  • Ramon Fauli-Oller
Article

Abstract.

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.

Keywords:

Merger antitrust implementation 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2004

Authors and Affiliations

  1. 1.Departamento de Economía, C/ Madrid 126Universidad Carlos IIIGetafeSpain
  2. 2.Departament Fonaments de l’Análisi EconómicaUniversitat d’AlacantAlacantSpain

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