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Natural Oligopoly Responses, Repeated Games, And Coordinated Effects In Merger Analysis: A Perspective And Research Agenda, Jonathan Baker

Articles in Law Reviews & Other Academic Journals

When the 1968 Merger Guidelines were drafted, both the economics and antitrust literatures addressed how competition could be softened when oligopolists anticipated the natural and predictable responses of their rivals to their competitive moves, such as price cuts or output expansion. But when economists developed new models of oligopoly behavior, and of coordinated efects in particular, the older ideas were dropped—until the 2010 Guidelines, when the older ideas were reincorporated along with the newer ones. Our article points out limitations of the workhorse repeated game model of oligopoly conduct for analyzing coordinated efects of mergers, and suggests ways to make …