English, Article, Journal or magazine article edition: COMPULSORY OR VOLUNTARY PRE-MERGER NOTIFICATION? THEORY AND SOME EVIDENCE Chander Shekhar; Chongwoo, Choe; Shekhar, Chander

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Bookmark: http://trove.nla.gov.au/version/16552
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Compulsory or Voluntary Pre-merger Notification? Theory and Some Evidence
Author
  • Chander Shekhar
  • Chongwoo, Choe
  • Shekhar, Chander
Physical Description
  • preprint
Notes
  • RePEc:mos:moswps:2008-20
  • We study a voluntary pre-merger notification game under asymmetric information and characterize perfect Bayesian equilibria. It is shown that the equilibrium outcomes are similar to those when notification is compulsory. However, thanks to the signaling opportunity that arises when notification is voluntary, voluntary notification leads to lower enforcement costs for the regulator and lower notification costs for the merging parties. Some of the theoretical predictions are supported by exploratory empirical tests using merger data from Australia where pre-merger notification is voluntary. Overall, our results suggest that voluntary merger notification may achieve objectives similar to those achieved by compulsory systems at lower costs to the parties as well as to the regulator.
  • RePEc:msh:moswps:2008-20
  • We compare the prevailing system of compulsory pre-merger notification with the Australian system of voluntary pre-merger notification. It is shown that, for a non-trivial set of parameter values, a perfect Bayesian equilibrium exists in mixed strategies in which the regulator investigates un-notified mergers with probability less than one and the parties choose notification with probability less than one. Thanks to the signaling opportunity that arises when notification is voluntary, voluntary notification leads to lower enforcement costs for the regulator and lower notification costs for the merging parties. Some of the theoretical predictions are supported by exploratory empirical tests using merger data from Australia. Overall, our results suggest that voluntary merger notification may achieve objectives similar to those achieved by compulsory systems at lower costs to the merging parties as well as to the regulator.
  • Merger regulation; pre-merger notification; abnormal returns
  • RePEc:pra:mprapa:13450
Language
  • English
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