A rational expectations critique of merger policy analysis
2005
A stricter merger control policy increases the expectation of future price competition. In response, firms increase product differentiation to sustain higher prices. Failing to account for such policy-variant prices may lead to overestimation of the increase in consumer surplus due to the stricter merger policy, rendering the policy analysis subject to the Lucas Critique.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
9
References
7
Citations
NaN
KQI