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Discussion Paper Details

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Title: A Political Economy Model of Merger Policy in International Markets

Author(s): Massimo Motta and Michele Ruta

Publication Date: June 2008

Keyword(s): Antitrust policy, European Union, Lobbying and Mergers

Programme Area(s): Industrial Organization

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.

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Bibliographic Reference

Motta, M and Ruta, M. 2008. 'A Political Economy Model of Merger Policy in International Markets'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6894