Merger simulation in an open economy

Jay Pil Choi, Jae Nahm

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Recently, competition authorities use merger simulation tools to predict the effects of a merger on price, consumer welfare and social welfare. However, since standard merger simulation tools are developed to predict those effects in a closed economy, they do not consider the role of exports in evaluating merger effects. In an open economy or export-oriented economy, a typical manufacturing industry exhibits quite high shares of export volumes. The welfare effects of merger could be quite different between an open economy and a closed economy. In an open economy, we need to consider exports in evaluating merger effects, and this article provides a framework on how to incorporate the role of exports in a standard Cournot merger simulation model.

    Original languageEnglish
    Pages (from-to)53-66
    Number of pages14
    JournalHitotsubashi Journal of Economics
    Volume57
    Issue number1
    Publication statusPublished - 2016 Jun

    Bibliographical note

    Publisher Copyright:
    © Hitotsubashi University.

    Keywords

    • Merger evaluation
    • Merger simulation
    • Open economy

    ASJC Scopus subject areas

    • General Business,Management and Accounting
    • Economics and Econometrics

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