Tuesday, October 20, 2009
Posted by D. Daniel Sokol
Pedro P. Barros, Universidade Nova de Lisboa, Joseph A. Clougherty, Wissenschaftszentrum Berlin für Sozialforschung (WZB), and Jo Seldeslachts, Wissenschaftszentrum Berlin für Sozialforschung (WZB) ask How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?
ABSTRACT: We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals.