Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change?

Michael L. Katz, Howard A. Shelanski

NBER Working Paper No. 10710
Issued in August 2004
NBER Program(s):   IO   PR

Merger policy is the most active area of U.S. antitrust policy. It is now widely believed that merger policy must move beyond its traditional focus on static efficiency to account for innovation and address dynamic efficiency. Innovation can fundamentally affect merger analysis in two ways. First, innovation can dramatically affect the relationship between the pre-merger marketplace and what is likely to happen if a proposed merger is consummated. Thus, innovation can fundamentally influence the appropriate analysis for addressing traditional, static efficiency concerns. Second, innovation can itself be an important dimension of market performance that is potentially affected by a merger. We explore how merger policy is meeting the challenges posed by innovation.

(374 K)

Published: Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change?, Michael L. Katz, Howard A. Shelanski, in Innovation Policy and the Economy, Volume 5 (2005), The MIT Press

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