DP7454 How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?

Author(s):	Pedro Pita Barros, Joseph A. Clougherty, Jo Seldeslachts
Publication Date:	September 2009
Keyword(s):	antitrust, deterrence, merger policy
JEL(s):	K21, L40, L49
Programme Areas:	Industrial Organization
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=7454

We show that the number of merger proposals (frequency-based deterrence) is a more appropriate indicator of underlying changes in merger policy than the relative anti-competitiveness of merger proposals (composition-based deterrence). This has strong implications for the empirical analysis of the deterrence effects of merger policy enforcement, and potential implications regarding how to reduce anti-competitive merger proposals.