Merger Policy with Merger Choice

摘要

In this paper, we have analyzed the optimal merger approval policy of an antitrust authority which seeks to maximize expected consumer surplus when there are several mutually exclusive merger possibilities and firms can choose which merger to propose. In our model, there is a single acquirer that can make a merger proposal to one of several, ex ante heterogeneous merger partners. While the feasibility and postmerger marginal costs of the various potential mergers is not known to the antitrust authority, the antitrust authority can observe the characteristics of the proposed merger. We have shown that in this environment the antitrust authority optimally commits to a policy that imposes a tougher standard on mergers involving firms with a larger premerger market share, or, equivalently in our model, inducing a larger increase in the naively computed Herfindahl index: the required minimum increase in consumer surplus is greater for mergers that are larger in this sense.