|
Table of Merger Decisions
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viii |
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Acknowledgments
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xiii |
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Foreword by Nicholas Levy
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xv |
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A Comment on the Text by Professor Jeffrey Church
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xvii |
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1 Introduction
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1 |
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1. Purpose and scope of this book
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1 |
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2. Legal framework and Commission procedure
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3 |
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2.1 The Merger Regulation
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3 |
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2.2 Procedure for notification and assessment
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7 |
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3. The role of economics in EU merger control
|
12 |
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4. Basic economic concepts
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13 |
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4.1 The demand curve
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14 |
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4.2 The cost curve
|
20 |
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4.3 Profit maximisation
|
23 |
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4.4 Market power
|
24 |
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5. Empirical economic evidence
|
27 |
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2 Market definition
|
31 |
|
1. Introduction
|
31 |
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2. Conceptual framework
|
33 |
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2.1 The hypothetical monopolist/SSNIP test
|
33 |
|
2.2 Issues and complications arising in market definition
|
36 |
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3. Empirical techniques to assess market definition
|
43 |
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3.1 Critical loss analysis
|
46 |
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3.2 Demand estimation
|
64 |
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3.3 Survey evidence
|
74 |
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3.4 Analysis of sales patterns
|
81 |
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3.5 Analysis of price levels
|
93 |
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3.6 Price correlation analysis
|
105 |
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3.7 Stationarity analysis
|
127 |
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3.8 Shock analysis
|
134 |
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3 Horizontal mergers I: unilateral effects
|
148 |
|
1. Introduction
|
148 |
|
2. Important competitive constraints: economic theory and the EC Horizontal Merger Guidelines
|
150 |
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2.1 Economic theory and key concepts
|
150 |
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2.2 Important competitive constraints in the EC Horizontal Merger Guidelines
|
158 |
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2.3 Commission's recent enforcement practice
|
163 |
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3. Important competitive constraints between the parties: empirical techniques
|
176 |
|
3.1 Survey evidence
|
177 |
|
3.2 Customer switching analysis
|
183 |
|
3.3 Price/concentration studies and analysis of the impact of rivals' presence
|
191 |
|
3.4 Entry analysis
|
207 |
|
3.5 Natural experiments
|
211 |
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3.6 Merger simulation
|
214 |
|
3.7 Win/loss and bidding analysis
|
231 |
|
4. Further issues relevant in the assessment of unilateral effects
|
251 |
|
4.1 Introduction
|
251 |
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4.2 Elimination of potential competition
|
252 |
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4.3 Rivals' ability to increase supply
|
258 |
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4.4 Switching costs
|
275 |
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4.5 Partial ownership
|
282 |
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5. Countervailing factors
|
288 |
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5.1 Introduction
|
288 |
|
5.2 Buyer power
|
288 |
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5.3 Product repositioning and new entry
|
298 |
|
5.4 Efficiency analysis
|
304 |
|
5.5 Failing firm defence
|
310 |
|
4 Horizontal mergers II: coordinated effects
|
318 |
|
1. Introduction
|
318 |
|
2. Economic concepts
|
321 |
|
2.1 Textbook tacit coordination
|
321 |
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2.2 Factors that affect the critical discount factor
|
326 |
|
3. Framework for the assessment of coordinated effects
|
335 |
|
3.1 Will the merged entity and remaining competitors be able to reach a tacit understanding?
|
337 |
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3.2 Are market characteristics such that any tacit understanding would likely be sustained?
|
349 |
|
3.3 Will the proposed transaction make it significantly more likely that tacit coordination will occur or make tacit coordination more effective?
|
368 |
|
5 Non-horizontal mergers
|
378 |
|
1. Introduction
|
378 |
|
2. Economic concepts
|
380 |
|
2.1 Pro-competitive effects
|
380 |
|
2.2 Foreclosure and anti-competitive foreclosure
|
385 |
|
2.3 Other anti-competitive effects
|
389 |
|
3. Vertical mergers: input foreclosure
|
391 |
|
3.1 Ability to engage in input foreclosure
|
393 |
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3.2 Incentive to engage in input foreclosure
|
409 |
|
3.3 Effect of input foreclosure
|
428 |
|
4. Vertical mergers: customer foreclosure
|
430 |
|
4.1 Ability to engage in customer foreclosure
|
432 |
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4.2 Incentive to engage in customer foreclosure
|
439 |
|
4.3 Effect of customer foreclosure
|
446 |
|
4.4 Customer foreclosure: EU case law
|
448 |
|
5. Conglomerate mergers
|
452 |
|
5.1 Ability to foreclose in conglomerate mergers
|
455 |
|
5.2 Incentive to foreclose in conglomerate mergers
|
458 |
|
5.3 Effects of foreclosure in conglomerate mergers
|
461 |
|
5.4 Foreclosure in conglomerate mergers: an example
|
464 |
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5.5 Assessment of foreclosure in conglomerate mergers: EU case law
|
480 |
|
6. Diagonal mergers
|
502 |
|
6.1 Diagonal mergers: an example
|
503 |
|
6.2 Case study: Google/Doubleclick – assessment of diagonal effects
|
504 |
|
Appendix ARegression analysis and econometrics
|
507 |
|
1. Regression analysis and statistical inference
|
507 |
|
2. Regression analysis, endogeneity and the identification of economic effects
|
515 |
|
Appendix BModels for demand estimation
|
520 |
|
1. Introduction
|
520 |
|
1.1 Alternative models for continuous demand estimation
|
520 |
|
1.2 Models for discrete demand estimation
|
522 |
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Index
|
526 |
