Profitable Horizontal Mergers Without Efficiencies Can Increase Consumer Surplus*

Charles J. Thomas

doi:10.1111/joie.12249

Merger Policy with Merger Choice

The American Economic Review ◽

10.1257/aer.103.2.1006 ◽

2013 ◽

Vol 103 (2) ◽

pp. 1006-1033 ◽

Cited By ~ 34

Author(s):

Volker Nocke ◽

Michael D Whinston

Keyword(s):

Market Share ◽

Optimal Policy ◽

Consumer Surplus ◽

Merger Policy ◽

Horizontal Mergers ◽

Antitrust Authority

We analyze the optimal policy of an antitrust authority towards horizontal mergers when merger proposals are endogenous and firms choose among alternative mergers. In our model, the optimal policy of an antitrust authority that seeks to maximize expected consumer surplus imposes a tougher standard on “larger” mergers, i.e., those involving firms with a larger pre-merger market share. The optimal policy is a response to a bias in firms' proposal incentives: firms always propose a larger merger when it is better for consumers than a smaller one, but sometimes will propose the larger one even when it is worse for consumers.

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Efficiency Defense in EU and US Horizontal Merger Control if Costs are Endogenous

German Economic Review ◽

10.1111/geer.12066 ◽

2016 ◽

Vol 17 (1) ◽

pp. 48-60

Author(s):

Manfred Neumann

Keyword(s):

Profit Maximization ◽

Consumer Surplus ◽

Merger Control ◽

Horizontal Merger ◽

Fixed Costs ◽

Horizontal Mergers ◽

Merger Guidelines ◽

Eu And Us ◽

Profit Maximizing ◽

Total Welfare

Abstract If fixed costs are endogenous, following from profit maximization, horizontal mergers are always profitable. They cause the price to rise and consumer surplus to decrease. A case of horizontal merger in which, according to the requirement of US and EU Merger Guidelines for an efficiency defense to be acceptable, the price declines or remains constant does not exist and therefore cannot be expected by profit maximizing partners to arise following a merger. Merger control should be guided by focusing on total welfare. Permitting cooperation in R&D, although profitable, is likely to be detrimental to welfare.

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Can Horizontal Mergers Without Synergies Increase Consumer Welfare? Cournot and Bertrand Competition Under Uncertain Demand

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2012-0049 ◽

2013 ◽

Vol 13 (1) ◽

pp. 453-484

Author(s):

Shiou Shieh ◽

Chi-Fei Huang ◽

Hsiao-Chi Chen

Keyword(s):

Consumer Surplus ◽

Cost Savings ◽

Consumer Welfare ◽

Welfare Effects ◽

Market Volatility ◽

Bertrand Competition ◽

Horizontal Mergers ◽

Market Demand ◽

Demand Information ◽

Cournot And Bertrand Competition

Abstract We analyze the welfare effects of horizontal mergers in a model wherein firms produce differentiated products and possess asymmetric information about uncertain market demand. Mergers do not bring about synergies or cost savings, but do allow firms to share their market demand information. We find that under Cournot competition, mergers without synergies could increase expected consumer surplus and social welfare, provided that market volatility is sufficiently large. The parameter spaces in which mergers are beneficial to consumers and society widen when products are more differentiated. In contrast, under Bertrand competition, mergers are always welfare reducing regardless of the degree of market volatility and extent of product differentiation. The driving force for the contrasting results lies in opposing welfare effects of information sharing in the contexts of quantity and price setting.

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The Factors Influencing Tourist Visitations Number in Curug Silawe

EFFICIENT Indonesian Journal of Development Economics ◽

10.15294/efficient.v2i3.35908 ◽

2019 ◽

Vol 2 (3) ◽

pp. 553-561

Author(s):

Novian Hangga Prakosa ◽

Fafurida Fafurida

Keyword(s):

Economic Value ◽

Consumer Surplus ◽

Sampling Technique ◽

Travel Cost ◽

Analysis Tool ◽

Literature Study ◽

Factors Influencing ◽

Negative Effect ◽

Value Estimation ◽

Positive Effect

The purposes of this research are to identify the influence of travel cost, income, distance, access, facilities, natural beautiness, and age on the number of individual visits to Curug Silawe and to estimate the economic value of Curug Silawe through individual travel cost method. The population in this study are tourists that visited Curug Silawe with sample of 98 respondents taken by the quota accidental sampling technique. The data collection method used are literature study and questionnaire. The analysis tool used are OLS linear regression and economic value estimation. The results showed the variables that influence the number of individual visits to Curug Silawe are income, distance and age. Income and age has a positive effect. While distance has a negative effect. The economic value of Curug Silawe reached IDR 1,109,930,140.48 per year. This value is obtained from consumer surplus obtained per individual per year of IDR 308,656.88. Tujuan dari penelitian ini adalah untuk mengidentifikasi pengaruh biaya perjalanan, pendapatan, jarak, akses, fasilitas, keindahan alam, dan usia pada jumlah kunjungan individu ke Curug Silawe dan untuk memperkirakan nilai ekonomi Curug Silawe melalui metode biaya perjalanan individu . Populasi dalam penelitian ini adalah wisatawan yang berkunjung ke Curug Silawe dengan sampel 98 responden yang diambil dengan teknik quota accidental sampling. Metode pengumpulan data yang digunakan adalah studi literatur dan kuesioner. Alat analisis yang digunakan adalah regresi linear OLS dan estimasi nilai ekonomi. Hasil penelitian menunjukkan variabel yang mempengaruhi jumlah kunjungan individu ke Curug Silawe adalah pendapatan, jarak dan usia. Penghasilan dan usia memiliki efek positif. Sedangkan jarak memiliki efek negatif. Nilai ekonomi Curug Silawe mencapai Rp1.109.930.140,48 per tahun. Nilai ini diperoleh dari surplus konsumen yang diperoleh per individu per tahun sebesar Rp308.656,88.

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