The horizontal merger guidelines define increased market power as the ability of one or more firms to profitably increase prices, reduce output, choice or quality of goods and services, diminish innovation. In most instances, the analyses focus on price as the relevant dimension of competition. Increasingly, however, an important parameter is the impact of a particular merger on the innovative activity of the merged entity and of its competitors post-merger.
Identifying the reaction of competitors upon a realized merger is a difficult task. One aspect is the identification of the relevant competitors and another aspect is that concentration is not a singular event. In this respect publicly available data is hardly suitable in order to portray competitors reactions upon mergers and acquisitions. Further empirical analysis should aim at a profound analysis of market definition. Data on legal disputes might be an appropriate starting point.
15.12.2005 - 16.08.2006
Economics of Innovation and Industrial Dynamics