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Journal of Competition Law and Economics Advance Access published online on September 11, 2009
Journal of Competition Law and Economics, doi:10.1093/joclec/nhp014
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© The Author (2009). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

MERGER SIMULATION IN COMPETITION POLICY: A SURVEY

Oliver Budzinski * and Isabel Ruhmer **

Correspondence: Email: obu{at}sam.sdu.dk

JEL: L40, C15, K21

Advances in competition economics as well as in computational and empirical methods have offered the scope for the employment of merger simulation models (MSMs) in merger-control procedures during the past almost 15 years. Merger simulation is, nevertheless, still a very young and innovative instrument of antitrust, and, therefore, its "technical" potential is far from being comprehensively exploited, and teething problems in its practical use in the antitrust environment prevail. We provide a classification of state-of-the-art MSMs and review their previous employment in merger cases as well as the problems and limitations currently associated with their use in merger control. In summary, MSMs represent an important and valuable extension of the toolbox of merger policy. However, they do not qualify as a magic bullet and must be combined with other more traditional instruments of competition policy to comprehensively unfold its beneficial effects.

* Department of Environmental and Business Economics, University of Southern Denmark, Esbjerg, Denmark, and MACIE—Marburg Center for Institutional Economics, Germany.

** Center for Doctoral Studies in Economics, University of Mannheim, Germany. E-mail: iruhmer{at}mail.uni-mannheim.de. The authors thank Ulrich Schwalbe, Wolfgang Kerber, Arndt Christiansen, and Niels Vestergaard for valuable comments on earlier versions of the paper, the participants of the 30th Hohenheimer Oberseminar (Nuernberg, April 2008) for helpful discussion, and Barbara Güldenring for valuable editorial assistance.


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