Posted by D. Daniel Sokol
Marta Troya-Martinez, University of Oxford – Department of Economics explores Information-Sharing Between Competition Authorities
ABSTRACT: The increasing number of antitrust cases that affect more than one country calls for more active cooperation between competition authorities. I analyse the impact of exchange of confidential information between two authorities deciding on a multinational merger. The authorities want to clear the merger if the information sent by the firm suggests that the expected welfare in their country will be enhanced and the firm can secretly manipulate the precision with which it transmits this information. The authorities differ in their leniency towards the merger and we focus on the cases where the authorities disagree about the decision. Under no information-sharing, the firm chooses an extreme level of precision: very high (low) for the most (least) lenient authority. Under information-sharing, the firm is restricted to choose the same precision for both authorities. The firm’s choice depends on the level of cooperation in the decision-making between the countries. If the authorities exert their veto power, the firm always uses the lowest level of precision. If the authorities also cooperate in the decision-making, the firm’s choice of precision may be non-monotonic in the average welfare implications and intermediate levels of precision are chosen. Other situations where the model can be applied abound in industrial organisation and political economy.
Featured News
Google and South Carolina Clash Over State Records Demand
May 8, 2024 by
CPI
Telefonica Germany Teams Up with Amazon Web Services to Migrate 5G Customers
May 8, 2024 by
CPI
Federal Judge Grants $7.4 Million Settlement in Pork Price-Fixing Case
May 8, 2024 by
CPI
Wilson Sonsini Bolsters Antitrust and Competition Practice with Key Partner Returns
May 8, 2024 by
CPI
EU to Scrutinize Telecom Italia’s Network Sale to KKR
May 8, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI