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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18677
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| Title: | | EU merger control in differentiated product industries  |
| Authors: | | Mariuzzo, Franco Walsh, Patrick Paul Whelan, Ciara |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1312 |
| Abstract: | | EU Merger Control Regulation No 4064/89 tended to rely on a dominance test, based on the market share of undertakings, to indicate the level and potential changes in market power. The use of such in differentiated product industries is questionable. New EC Merger Regulation No 139/2004 introduces a substantive test to ensure that all post-merger scenarios posing a threat to competition, even amongst small undertakings, are detected. We propose the use of a simple structural approach to undertake a substantive test. We illustrate our point over 28 periods, 178 products (13 companies), for Retail Carbonated Soft Drinks. We estimate company (product) mark-ups using a ?simple? Nested Logit model, Berry (1994) and a more ?sophisticated? model, Berry, Levinsohn and Pakes (1995). While the dominance test may fail to identify damaging mergers in differentiated products industries, this technique will not. |
| Subjects: | | market shares market power differentiated products industries mergers |
| JEL: | | L40 L81 L25 L11 K2 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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