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Recent Advances in the Analysis of Competition Policy and Regulation

Recent Advances in the Analysis of Competition Policy and Regulation

Edited by Joseph E. Harrington Jr and Yannis Katsoulacos

Bringing scholars and policymakers to the frontiers of research and addressing the critical issues of the day, the book presents original important new theoretical and empirical results. The distinguished contributors include: P. Agrel, K. Alexander, J. Crémer, X. Dassiou, G. Deltas, F. Etro, L. Filistrucchi, P. Fotis, M. Gilli, J. Harrington Jr, T. Huertas, M. Ivaldi, B. Jullien, V. Marques, M. Peitz, Y. Spiegel, E. Tarrantino and G. Wood.

Chapter 10: Assessing Unilateral Merger Effects in the Dutch Daily Newspaper Market

Lapo Filistrucchi, Tobias J. Klein and Thomas O. Michielsen

Subjects: economics and finance, competition policy


Lapo Filistrucchi, Tobias J. Klein and Thomas O. Michielsen1 10.1 INTRODUCTION The newspaper market is a typical example of a so-called two-sided market: publishers sell content to readers and advertising slots to advertisers, while taking into account that the demand for advertisements in a newspaper depends positively on its circulation and the demand of readers might be affected by the number (or concentration) of ads in the newspaper (Anderson and Gabszewicz, 2006). When it comes to assessing a proposed merger, competition authorities are, as a rule, required to establish whether a horizontal merger is likely to raise concerns with respect to unilateral or non-coordinated effects (that is, whether the merger might increase the market power of the merging firms) and with respect to coordinated or collusive effects (that is, whether the merger might make collusion more likely). With regard to the assessment of unilateral merger effects, competition authorities have devised different methods to address the issue. For instance, initial screening has traditionally been based on the analysis of the market shares of the merging parties and of (the changes in) the HerfindahlHirschman Index (HHI). Hence mergers among firms with market shares below a given threshold and mergers characterized by a post-merger HHI and a change in the HHI below certain thresholds have been almost automatically approved. For mergers judged to be worthy of further investigation, full merger simulations have only seldom been conducted. More often, preference has been given to a small but significant nontransitory increase in price (SSNIP)-type...

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