Early Settlement and Errors in Merger Control

Garrod, Luke and Lyons, Bruce (2011) Early Settlement and Errors in Merger Control. CCP Working Paper.

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We develop a model of remedy offers made to an expert agency which has powers to act before any harm is experienced and is required to decide on the basis of tangible evidence. The model provides a relationship between the factors determining the probability of delay and the type of error in early settlements (i.e. insufficient versus excessive remedy). We apply the model using data from European Commission merger settlements. Our econometric analysis confirms the importance of delay costs and the uncertainty associated with the agency’s findings. Our results are also consistent with the prediction that delay is not systematically related to the inherent competitive harm of the merger proposal. We use our results to identify specific cases of insufficient remedy in early settlements.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > Norwich Business School
Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Industrial Economics
Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Depositing User: Bruce Lyons
Date Deposited: 11 Apr 2011 14:26
Last Modified: 23 May 2023 23:53
URI: https://ueaeprints.uea.ac.uk/id/eprint/28800


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