Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?
() and Lars Sørgard
Abstract: This paper deals with the enforcement of merger policy,
and aims to study how merger emedies affect the deterrence accomplished by
controlling mergers. We determine the optimal frequency of investigations
launched by the agency, and identify situations where the introduction of
remedies can lead to a lower welfare. We find that the potential for
remedies can make it less likely that the worst mergers are deterred. Even
if the worst mergers are deterred, the potential for remedies can lead to
more mergers with a negative impact to be proposed, and eventually to more
decision errors by the antitrust authorities.
Keywords: Merger control; merger remedies; enforcement; deterrence.; (follow links to similar papers)
JEL-Codes: K21; L41; (follow links to similar papers)
26 pages, March 25, 2014
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