Horizontal Merger and Merger Remedies in Antitrust Law : A Unified Explanation of Regulatory Constraints under the Linear Demand

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The antitrust regulator often imposes a merger remedy on a horizontally merged firm in order to remove the anti-competitive effect of the merger. From the economic viewpoint, a merger remedy is a kind of regulatory constraint. This paper analyzes how various kinds of regulatory constraints affect the merged firm’s profit in the linear demand model. We show that various forms of regulatory constraints are replaced by the simple total supply\nconstraint. We graph the relationship between regulatory constraints and the corresponding total supply constraint.

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