[Econmaster2012] Research Seminar in Economics

[Frank Stähler]

Dear all,

The presenter in this week's "Research Seminar in Economics" on Tuesday, 
22.10., is Holger Breinlich from the University of Essex. The title of 
his talk will be

"Cross-Border Price Effects of Mergers and Aquisitions - A Quantitative 
Framework for Competition Policy"

http://www.wiwi.uni-tuebingen.de/forschung0/research-seminars/research-seminar-in-economics.html

The seminar starts at 18.00 h in Room E09, Mohlstr. 36. You can find an 
abstract of the paper below.

Everybody is welcome.

Best wishes,
Udo Kreickemeier

Abstract:
Decisions of national competition authorities have important effects on 
other jurisdictions. We provide a framework to quantify the domestic and 
cross-border effects of mergers, and to draw conclusions for the 
coordination of national merger policies. We develop a two-country model 
with many sectors. In each sector, producers vary in terms of their 
marginal costs, and are engaged in Cournot competition. We allow for 
profitable mergers to take place subject to the non-violation of a given 
national competition policy. Because of trade costs and perceived 
differences in qualities between domestic and foreign products, mergers 
may have different consumer surplus effects in the home and the foreign 
country. We calibrate the model using data for the year 2002 for 167 
manufacturing sectors in the U.S. and Canada. We choose parameters to 
match relevant moments in the data, including industry sales, 
concentration ratios and trade flows. We find that in the majority of 
industries a merger approval policy based on domestic consumer surplus 
is too restrictive from the viewpoint of the neighboring country. We 
also show that adopting a supra-national policy that approves a merger 
if and only if it increases the sum of consumer surplus in the two 
countries would lead to significant gains for U.S. consumers but hurt 
consumers in Canada. These results highlight the difficulties in 
coordinating national competition policies in a way acceptable to all 
participating countries.


-- 

Frank Stähler
Professor of Economics
Department of Economics
International Economics and Labor Markets
The University of Tübingen
Mohlstr. 36 (V4)
D-72074 Tübingen, Germany
frank.staehler at uni-tuebingen.de

Adjunct Professor of Economics
School of Economics
The University of Adelaide
frank.staehler at adelaide.edu.au

http://www.frank-staehler.de