Coordinated Effects in Merger Review

Journal Article (Journal Article)

Coordinated effects are merger-related harms that arise because a subset of postmerger firms modify their conduct to limit competition among themselves, particularly in ways other than explicit collusion. We provide a measure of the risk of such conduct by examining the individual rationality of participation by subsets of firms in market allocation schemes. This measure of risk for coordinated effects distinguishes markets that are at risk from those that are not and distinguishes mergers that increase risk from those that do not. A market’s risk for market allocation by a subset of firms varies with the degree of outside competition, symmetry and strength of the subset of firms, buyers’ power, and vertical integration. We make precise the widely used but rarely rigorously defined notion of a maverick firm and provide foundations for a maverick-based approach to coordinated effects. In addition, we identify previously unrecognized trade-offs between unilateral and coordinated effects.

Full Text

Duke Authors

Cited Authors

  • Loertscher, S; Marx, LM

Published Date

  • November 1, 2021

Published In

Volume / Issue

  • 64 / 4

Start / End Page

  • 705 - 744

International Standard Serial Number (ISSN)

  • 0022-2186

Digital Object Identifier (DOI)

  • 10.1086/714919

Citation Source

  • Scopus