Topics in Corporate Law and Competition Law

Abstract

One of the key insights of the Coase Theorem is that the inefficiencies and difficulties that are associated with uncompensated positive and negative external effects can be mitigated if parties are permitted to bargain. For firms, one extreme form of bargaining is to permanently internalise externalities by merging. This can happen through formal merger negotiations or via takeover bids. This chapter examines some of the economic issues that arise within firms in response to different legal rules, and when firms seek to internalise externalities by merging. The Chapter also studies a wide variety of economic issues that arise in corporate law and governance, and competition law.