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Jacobs, Michael S. --- "Second Order Oligopoly Problems with International Dimensions: Sequential Mergers, Maverick Firms and Buyer Power" [2002] ELECD 94; in Cucinotta, Antonio; Pardolesi, Roberto; Van den Bergh, J. Roger (eds), "Post-Chicago Developments in Antitrust Law" (Edward Elgar Publishing, 2002)

Book Title: Post-Chicago Developments in Antitrust Law

Editor(s): Cucinotta, Antonio; Pardolesi, Roberto; Van den Bergh, J. Roger

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760016

Section: Chapter 8

Section Title: Second Order Oligopoly Problems with International Dimensions: Sequential Mergers, Maverick Firms and Buyer Power

Author(s): Jacobs, Michael S.

Number of pages: 22

Extract:

8. Second order oligopoly problems with
international dimensions: sequential
mergers, maverick firms and buyer
power
Michael S. Jacobs

INTRODUCTION
The unprecedented merger wave of the past several years has consolidated
many markets, and raised the specter that economies worldwide may be
increasingly subject to oligopolistic coordination. Oligopoly problems are
hardly new to competition law, but the largest of those problems, though well-
rehearsed, are seemingly irresolvable.1 Are oligopolists more likely to
compete with one another than to collude?2 Is collusively coordinated behav-
ior apt to succeed, and if so under what kinds of conditions?3 Does signaling,
or the use of focal points available in certain oligopoly markets, sometimes or
always obviate the need for collusion in those very markets where successful
coordination is more likely to occur?4 Is collusion more likely in a three-firm
market than in a four-firm one?
These are large and important questions indeed. The fact that they remain
unanswered despite the increasing sophistication in economic theory and
methodology that is the hallmark of the post-Chicago School suggests that
oligopoly in general is highly resistant to coherent analysis. The large increase
in recent years in the number of oligopoly markets suggests that coherent
analysis is more important than ever.
The worldwide merger wave of the late 1990s5 has resulted in substantial
increases in concentration levels in dozens of markets and in almost all devel-
oped countries. In some of those countries, most notably Australia and New
Zealand, great distance from ...