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on Industrial Organization |
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Issue of 2008‒07‒05
two papers chosen by |
| By: | Motta, Massimo; Ruta, Michele |
| Abstract: | This paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities (whose objective is to maximize welfare) but can be influenced by governments, which are subject to lobbying by the firms (be they insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases, which have been widely debated in the international press. |
| Keywords: | Antitrust policy; European Union; Lobbying; Mergers |
| JEL: | D72 F59 H11 L40 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6894&r=ind |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Forward sales is a credible commitment to aggressive spot market bidding, and it mitigates producers’ market power in electricity markets. Still it can be profitable for a producer to make such a commitment if it results in a soft response from competitors in the spot market (strategies are substitutes). The optimal contracting level of a risk-neutral producer is determined by the extent to which strategies are substitutes and the slope of the residual demand in the forward market. Conditions under which strategies are substitutes are identified for a two-stage game with supply function competition and capacity constrained producers. |
| Keywords: | Supply Function Equilibrium; Forward Market; Strategic Contracting; Arbitrage; Strategic Substitutes; Oligopoly; Electricity Market |
| JEL: | C72 D43 D44 G13 L13 L94 |
| Date: | 2008–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0756&r=ind |