Should alternative mergers or acquisitions be considered by antitrust authorities?

This paper illustrates how taking alternative mergers into consideration when analyzing the effects of a proposed merger may provide some information to the antitrust authorities. In particular, the use of revealed preference may allow the authorities to establish an expected upper limit on the efficiency gains obtained in a given merger that also increases the participants' market power. Such limit can then be compared to the lower threshold necessary for merger approval. The policy implications of this result are discussed. (c) 2004 Elsevier B.V. All rights reserved.