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Part V Advancing a Research Agenda for the Agencies and Academics, 20 Need for Retrospectives of Data-Driven Mergers

Maurice E. Stucke, Allen P. Grunes

From: Big Data and Competition Policy

Maurice Stucke, Allen Grunes

From: Oxford Competition Law (http://oxcat.ouplaw.com). (c) Oxford University Press, 2021. All Rights Reserved.date: 17 January 2021

Rights — Internet — Technology

This chapter discusses the benefits of conducting merger retrospectives. It highlights the risk of false negatives under the current quantification paradigm. One benefit is that the competition authority can evaluate its or the courts’ assumptions and analytical tools. Although the anticompetitive effects could be caused by unforeseen intervening events, the agency and court typically assess mergers through their price-centric models, which rely on several assumptions, such as the likely reaction of rational, self-interested consumers with willpower to a small, but significant, non-transitory price increase. The behavioural economic scholarship has drawn into question these assumptions of rationality and willpower. Thus, the merger retrospectives will reveal what happened to price and non-price competition and the extent to which actual marketplace behaviour comports with the predicted behaviour of rational agents with willpower.

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