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The amount of price changes in a closed economy

The amount of price changes in a closed economy

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Since the mid-1990s, antitrust authorities and courts in the U.S and the EU use several merger simulation models to evaluate unilateral effects of horizontal mergers. Merger simulation models combine game theoretic models with some premerger market data such as demand elasticity to predict the impact of the merger on price, consumers' surplus and t...

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This paper examines the economic consequences of a horizontal merger between two Korean automakers in 1998. Estimates of structural demand and supply reveal that the merger enhanced the production efficiency of the merging parties by a magnitude of 8.4%. Simulations based on the estimates indicate that while the merger increased domestic auto prices, it more than doubled the exports of the merging parties. The merger effects vary according to auto model type.