Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81216
Authors: 
Ganslandt, Mattias
Persson, Lars
Vasconcelos, Helder
Year of Publication: 
2007
Series/Report no.: 
IFN Working Paper 719
Abstract: 
In their merger control, EU and the US have considered symmetric size distribution (cost structure) of firms to be a factor potentially leading to collusion. We show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with higher risk of collusion, when firms face indivisible costs of collusion. In particular, we show that if the rule determining the collusive outcome has the property that the large (efficient) firm benefits sufficiently more from collusion when industry asymmetries increase, collusion can become more likely when firms are moderately asymmetric.
Subjects: 
Collusion
Cost Asymmetries
Merger Policy
JEL: 
D43
L41
Document Type: 
Working Paper

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