Munich Personal RePEc Archive

Mergers on Networks

Dubovik, Andrei (2018): Mergers on Networks.

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Abstract

I study mergers where each firm owns multiple shops across a country. Presently, the European Commission views every shop, together with the shops from its catchment area, as an isolated market. Such an approach is internally inconsistent. I show how to extend the European Commission's approach to consistently take overlaps in catchment areas into account. My model is a specialization of the existing network theory that is aimed to be feasible in real merger cases. As a demonstration, I study a past merger case and I find that neglecting overlaps in catchment areas can result in substantial biases.

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