Consumer surplus vs. welfare standard in a political economy model of merger control
Abstract: "This paper considers merger control in a common agency framework where firms and their competitors can influence the antitrust agency and where transparency - while making lobbying less effective - also implies real resource costs. We examine the performance of two alternative standards that can be assigned to the antitrust agency in the presence of these regulatory failures. We find that under a welfare standard, lobbying leads to the clearance of relatively inefficient mergers that decrease welfare (i.e. there is a type II error). By contrast, under a consumer surplus standard, the agency will ban relatively efficient mergers that would increase welfare (i.e. there is a type I error). Lobbying actually reduces the extent to which this occurs, albeit at a cost in terms of real resources. We also find that a consumer surplus standard is more attractive when mergers are large, when increasing the size of a merger greatly enhances industry profits, when there is little transparency
- Alternative title
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Konsumentenrente vs. Wohlfahrtskriterium in einem polit-ökonomischen Modell der Fusionskontrolle
- Location
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Deutsche Nationalbibliothek Frankfurt am Main
- Extent
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Online-Ressource, 27 S.
- Language
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Englisch
- Notes
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Veröffentlichungsversion
- Bibliographic citation
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Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Marktprozeß und Unternehmensentwicklung, Abteilung Wettbewerbsfähigkeit und industrieller Wandel ; Bd. 00-15
- Keyword
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Fusionskontrolle
Interessenpolitik
LEN-Modell
Wohlfahrtseffekt
Theorie
- Event
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Veröffentlichung
- (where)
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Berlin
- (when)
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2000
- Creator
- Contributor
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
- URN
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urn:nbn:de:0168-ssoar-116117
- Rights
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Open Access unbekannt; Open Access; Der Zugriff auf das Objekt ist unbeschränkt möglich.
- Last update
-
15.08.2025, 7:29 AM CEST
Data provider
Deutsche Nationalbibliothek. If you have any questions about the object, please contact the data provider.
Associated
- Neven, Damien J.
- Röller, Lars-Hendrik
- Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Time of origin
- 2000
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Correction: Two extensions of consumer surplus
A small firm leads to curious outcomes: Social surplus, consumer surplus
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