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Coordinated Effects in Merger Review

Publication ,  Journal Article
Loertscher, S; Marx, LM
Published in: Journal of Law and Economics
November 1, 2021

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.

Duke Scholars

Published In

Journal of Law and Economics

DOI

ISSN

0022-2186

Publication Date

November 1, 2021

Volume

64

Issue

4

Start / End Page

705 / 744

Related Subject Headings

  • Economics
  • 3801 Applied economics
  • 1801 Law
  • 1402 Applied Economics
 

Citation

APA
Chicago
ICMJE
MLA
NLM
Loertscher, S., & Marx, L. M. (2021). Coordinated Effects in Merger Review. Journal of Law and Economics, 64(4), 705–744. https://doi.org/10.1086/714919
Loertscher, S., and L. M. Marx. “Coordinated Effects in Merger Review.” Journal of Law and Economics 64, no. 4 (November 1, 2021): 705–44. https://doi.org/10.1086/714919.
Loertscher S, Marx LM. Coordinated Effects in Merger Review. Journal of Law and Economics. 2021 Nov 1;64(4):705–44.
Loertscher, S., and L. M. Marx. “Coordinated Effects in Merger Review.” Journal of Law and Economics, vol. 64, no. 4, Nov. 2021, pp. 705–44. Scopus, doi:10.1086/714919.
Loertscher S, Marx LM. Coordinated Effects in Merger Review. Journal of Law and Economics. 2021 Nov 1;64(4):705–744.
Journal cover image

Published In

Journal of Law and Economics

DOI

ISSN

0022-2186

Publication Date

November 1, 2021

Volume

64

Issue

4

Start / End Page

705 / 744

Related Subject Headings

  • Economics
  • 3801 Applied economics
  • 1801 Law
  • 1402 Applied Economics