期刊名称：CORE Discussion Papers / Center for Operations Research and Econometrics (UCL), Louvain
出版年度：2008
卷号：1
出版社：Center for Operations Research and Econometrics (UCL), Louvain
摘要：In the theoretical literature, strong arguments have been provided in support of the efficiency
defense in antitrust merger policy. One of the most often cited results is due to Williamson
(1968) that shows how relatively small reduction in cost could offset the deadweight loss of a
large price increase. Furthermore, Salant et al. (1983) demonstrate that (not for monopoly)
mergers are unprofitable absent efficiency gains. The general result, drawn in a Cournot
framework by Farrell and Shapiro (1990), is that (not too large) mergers that are profitable are
always welfare improving.
In the present work we challenge the conclusions of this literature in two aspects. First, we
show that Williamson's results underestimate the welfare loss due to a price increase and
overestimate the effect of efficiency gains. Then, we prove that the conditions for welfare
improving mergers defined by Farrell and Shapiro (1990) hold true only when consumers are
adversely affected. This seems an argument to disregard their policy prescriptions when
antitrust authorities are more "consumers-oriented". In this respect, we provide a necessary
and sufficient condition for a consumer surplus improving merger: in a two firm merger,
efficiency gains must be larger than the pre-merger average markup.
