Thibaud Vergé

HORIZONTAL MERGERS, STRUCTURAL REMEDIES, AND CONSUMER WELFARE IN A COURNOT OLIGOPOLY WITH ASSETS*

Competition authorities sometimes require that firms divest some of their assets to rivals in order to allow a merger to take place. This paper extends the results of Farrell and Shapiro [1990a] and shows that, in the absence of technological synergies, a merger is highly unlikely to benefit consumers, even if it is subjected to appropriate structural remedies. For instance, a merger may ultimately lead to a lower price only if at least two different firms acquire the divested assets, and if the merging parties had relatively important pre-merger market shares.

Communication and Binary Decisions: Is it Better to Communicate?

We study information transmission between informed experts and an uninformed decision-maker who only takes binary decisions. In the single expert case, we show that information transmission can only be relatively poor. Hence, even sophiscated communication games do not yield equilibria which (ex ante) outperform delegation. Referring to multiple experts allow the decision-maker to obtain more information. However, this information can never be perfect, and sophisticated communication games, for instance with multilateral, multistage communication, do not outperform simple communication methods.