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
Pfizer Settles Remaining Effexor XR Antitrust Claims for $25.5 Million
Apr 29, 2024 by
CPI
South Korean Regulator Approves LG Uplus and Kakao Mobility EV Charging Venture
Apr 29, 2024 by
CPI
Federal Judge Dismisses Doctors’ Antitrust Suit Against Ohio Health System
Apr 29, 2024 by
CPI
Paramount CEO Bob Bakish Steps Down as Merger Inches Closer
Apr 29, 2024 by
CPI
EU Brands Apple’s iPadOS as Gatekeeper in Tech Crackdown
Apr 29, 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