Merger simulation in an open economy

Jay Pil Choi, Jae Hyon Nahm

Research output: Contribution to journalArticle

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 1

Fingerprint

Merger simulation
Open economy
Mergers
Authority
Social welfare
Simulation model
Consumer welfare
Welfare effects
Manufacturing industries
Cournot

Keywords

  • Merger evaluation
  • Merger simulation
  • Open economy

ASJC Scopus subject areas

  • Economics and Econometrics
  • Business, Management and Accounting(all)

Cite this

Merger simulation in an open economy. / Choi, Jay Pil; Nahm, Jae Hyon.

In: Hitotsubashi Journal of Economics, Vol. 57, No. 1, 01.06.2016, p. 53-66.

Research output: Contribution to journalArticle

Choi, Jay Pil ; Nahm, Jae Hyon. / Merger simulation in an open economy. In: Hitotsubashi Journal of Economics. 2016 ; Vol. 57, No. 1. pp. 53-66.
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