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Enforcement vs deterrence in merger control : can remedies lead to lower welfare?

Cosnita-Langlais, Andreea; Sørgard, Lars
Working paper
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URI
http://hdl.handle.net/11250/194525
Date
2014-03
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  • Discussion papers (SAM) [586]
Abstract
This paper deals with the enforcement of merger policy, and aims to study how merger

remedies affect the deterrence accomplished by controlling mergers. We determine the

optimal frequency of investigations launched by the agency, and identify situations where

the introduction of remedies can lead to a lower welfare. We nd that the potential for

remedies can make it less likely that the worst mergers are deterred. Even if the worst

mergers are deterred, the potential for remedies can lead to more mergers with a negative impact to be proposed, and eventually to more decision errors by the antitrust authorities.
Publisher
Norwegian School of Economics. Department of Economics
Series
Discussion paper;7/2014

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