Wednesday, June 26, 2019
Gregor Langus, European Union - European Commission and Jorge Padilla, Compass Lexecon identify Non-Horizontal Mergers with Investments into Compatibility.
ABSTRACT: We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive and ability to foreclose rivals.