Theory Meets Practice: Barriers to Entry in Merger Analysis
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Malcolm B. Coate
Barriers to entry are a necessary, but not sufficient condition for a merger to adversely affect competition. As a barrier definition must be linked to the specific theory of competitive concern under review to be meaningful, a theoretical barrier definition is unlikely to be useful. Instead, an operational definition of barriers to entry is required. This paper explores the operationalization of the Merger Guidelines barrier to entry concept. A review of the files observes that most matters involve multiple entry scenarios, so it is often impossible to draw strict conclusions for the individual characteristics of timeliness, likelihood or sufficiency. However, by following each entry scenario through the three-stage analysis, it is possible to identify barriers to entry in 109 of the 138 matters reviewed. Within this analysis, the timeliness consideration is generally supported by the best evidence, while the likelihood characteristic leaves the most room for improvement. A total of 55 matters exhibit evidence of recent entry and 46 files report expectations of future entry. A few files detail innovative net present value analyses to determine the profitability of entry into the market. This type of financial analysis offers the promise of a quantitative approach to likelihood analysis.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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- The Hidden Bias of the Vienna Convention on the International Law of Treaties
- Differential Victimization: Efficiency and Fairness Justifications for the Felony Murder Rule
- Underpricing of IPOs and Legal Frameworks Around the World
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Artikel in diesem Heft
- Article
- Paying the Price for Being Caught: The Economics of Manifest and Non-Manifest Theft in Roman Law
- Measuring Skill in Games with Random Payoffs: Evaluating Legality
- Timing of Crime, Learning and Sanction
- Controlling Avoidance: Ex Ante Regulation Versus Ex Post Punishment
- Damages for Breach of Contract, Impossibility of Performance and Legal Enforceability
- Social Norms, Self-Interest and Ambiguity of Legal Norms: An Experimental Analysis of the Rule vs. Standard Dilemma
- Frischmann's View of "Toward a Theory of Property Rights"
- Causation and Incentives to Choose Levels of Care and Activity Under the Negligence Rule
- A Positive Theory of Strict Liability
- Theory Meets Practice: Barriers to Entry in Merger Analysis
- Expert Testimony, Daubert, and the Determination of Damages
- Split-Estate Negotiations: The Case of Coal-Bed Methane
- Attorneys' Compensation in Litigation with Bilateral Delegation
- The Paradox of Expected Punishment: Legal and Economic Factors Determining Success and Failure in the Fight against Organized Crime
- The Biasing Effects of Memory Distortions on the Process of Legal Decision-Making
- Transaction Costs, Neighborhood Effects, and the Diffusion of the Uniform Sales Act, 1906-47
- A Note on the Social versus Private Value of Suits when Care is Bilateral
- The Hidden Bias of the Vienna Convention on the International Law of Treaties
- Differential Victimization: Efficiency and Fairness Justifications for the Felony Murder Rule
- Underpricing of IPOs and Legal Frameworks Around the World
- Damages or Reinstatement: Incentives and Remedies for Unjust Dismissal
- Jury Verdicts in Drunken Driving Cases
- The Market for Lawyers and Social Capital: Are Informal Rules a Substitute for Formal Ones?
- Competition and Unitization in Oil Extraction: A Tale of Two Tragedies
