Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119433
Authors: 
Giebe, Thomas
Lee, Miyu
Year of Publication: 
2015
Series/Report no.: 
SFB 649 Discussion Paper 2015-011
Abstract: 
There are legal grounds to hear competitors in merger control proceedings, and competitor involvement has gained significance. To what extent this is economically sensible is our question. The competition authority applies some welfare standard while the competitor cares about its own profit. In general, but not always, this implies a conflict of interest. We formally model this setting with cheap talk signaling games, where hearing the competitor might convey valuable information to the authority, but also serve the competitor's own interests. We find that the authority will mostly have to ignore the competitor but, depending on the authority's own prior information, strictly following the competitor's selfish recommendation will improve the authority's decision. Complementary to our analysis, we provide empirical data of competitor involvement in EU merger cases and give an overview of the legal discussion in the EU and US.
Subjects: 
merger control
antitrust
European Commission
signaling
efficiency
competitors
rivals
JEL: 
G34
K21
L4
C73
L2
Document Type: 
Working Paper

Files in This Item:
File
Size
845.58 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.