Game-theoretic aspects of international mergers: Theory and case studies

García-Gallego, A., Georgantzis, N., Gil-Moltó, M. J. and Orts, V. (2006) Game-theoretic aspects of international mergers: Theory and case studies. International Review of Law and Economics, 26 (3). pp. 395-409. ISSN 0144-8188 doi: 10.1016/j.irle.2006.11.008

Abstract/Summary

This paper studies the exclusion of potential competition as a motivating factor for international mergers. We propose a simple game-theoretic framework in order to discuss the conditions under which mergers that prevent reciprocal domestic competition will occur. Our analysis highlights the shortcomings of antitrust policies based on pre-merger/post-merger concentration comparisons. A review of several recent European cases suggests that actual merger policy often fails to consider potential competition.