Working Paper Series
A Consumer Surplus Defense in Merger Control
Abstract: A government wanting to promote an efficient allocation of
resources as measured by the total surplus, should strategically delegate
to its competition authority a welfare standard with a bias in favour of
consumers. A consumer bias means that some welfare increasing mergers will
be blocked. This is optimal, if the relevant alternative to the merger is
another change in market structure that will even further increase the
total surplus. Furthermore, a consumer bias is shown to enhance welfare
even though it blocks some welfare increasing mergers when the relevant
alternative is the status quo.
Keywords: Merger Control; Competition Policy; Consumer Surplus; (follow links to similar papers)
JEL-Codes: L11; L13; L41; (follow links to similar papers)
25 pages, January 3, 2007
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