Two firms propose a merger to the antitrust authority. They are uninformed about the efficiencies generated by the merger, but can hire an expert to gather information on their behalf. The authority is also uninformed about the merger’s efficiencies, but can run a costly internal investigation to learn them. We analyze the effect of the disclosure of the expert’s contract on consumer welfare, and show that consumers are not necessarily better off with disclosure. This possibility result hinges on a free-riding problem between expert and authority in the information acquisition game, and is more relevant in highly competitive industries.

M&A Advisory and the Merger Review Process / Michele, Bisceglia; Salvatore, Piccolo; Tarantino, Emanuele. - In: INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION. - ISSN 0167-7187. - 87:(2023), pp. 1-20. [10.1016/j.ijindorg.2023.102919]

M&A Advisory and the Merger Review Process

Tarantino, Emanuele
2023

Abstract

Two firms propose a merger to the antitrust authority. They are uninformed about the efficiencies generated by the merger, but can hire an expert to gather information on their behalf. The authority is also uninformed about the merger’s efficiencies, but can run a costly internal investigation to learn them. We analyze the effect of the disclosure of the expert’s contract on consumer welfare, and show that consumers are not necessarily better off with disclosure. This possibility result hinges on a free-riding problem between expert and authority in the information acquisition game, and is more relevant in highly competitive industries.
2023
Advice, Competition policy, Mergers, Advisory contract, Disclosure
M&A Advisory and the Merger Review Process / Michele, Bisceglia; Salvatore, Piccolo; Tarantino, Emanuele. - In: INTERNATIONAL JOURNAL OF INDUSTRIAL ORGANIZATION. - ISSN 0167-7187. - 87:(2023), pp. 1-20. [10.1016/j.ijindorg.2023.102919]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11385/226078
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