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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18951| Title: | Virtual capacity and competition |
| Keywords: | D44 L41 L40 ddc:330 virtual capacity reputation tacit collusion antitrust mergers competition policy Kartell Übernahme Fusion Wettbewerbsaufsicht Marktanteil Wettbewerbspolitik Theorie |
| Issue Date: | 16-Oct-2013 |
| Publisher: | |
| Description: | In several European merger cases competition authorities have demanded that the merging firm auctions off virtual capacity. The buyer of virtual capacity receives an option on an amount of output at a pre-specified price, typically equal to marginal cost. This output is sold in the market in competition with the merging firm. The paper compares sale of physical and virtual capacity by the merging firm and shows that virtual capacity leads to a less competitive outcome. The merging firm can build up a reputation for producing little, so that the output price increases in the market, and this increases the auction price on virtual capacity. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18951 |
| Other Identifiers: | http://hdl.handle.net/10419/18951 ppn:500465827 |
| Appears in Collections: | EconStor |
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