Template-Type: ReDIF-Paper 1.0
Title: Optimal Merger Remedies
Author-Name: Volker Nocke
Author-Email: volker.nocke@gmail.com
Author-Name: Andrew Rhodes
Author-Email: andrew.rhodes@tse-fr.eu
Classification-JEL: L13, L40, D43
Keywords: Horizontal mergers, divestitures, Cournot, merger control

Abstract: 
This paper studies optimal merger remedies when an antitrust authority has a consumer surplus standard. Remedies are modeled as asset divestitures which
make the firm receiving the assets more efficient, at the expense of the merged firm. If a merger affects only a single market, asset divestitures on their own are
not sufficient for the merger to be implemented--synergies are also required. As the market becomes less competitive, it is less likely that any merger is
implemented; conditional on implementing one, it is more likely that divestitures are used to create a new competitor. If instead a merger affects several
different markets, and the authority cares about consumer surplus aggregated over all markets, then it is optimal to divest as many assets as feasible in some
markets and no assets in all remaining markets. The optimal merger proposal is more likely to entail divestitures in more competitive markets.

Note: 
Length: 48
Creation-Date: 2025-04
Revision-Date:
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp680
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2025_680