Entry analysis under the 1992 horizontal merger guidelines

Article Abstract:

The 1992 horizontal merger guidelines give a more sophisticated framework for analyzing the role of entry and to what degree it would detract from the anticompetitive effects of a merger than the 1984 guidelines. The new guidelines differentiate between 'committed' and 'uncommitted' entry. Uncommitted firms enter a market in response to a short-term chance for profit; committed firms enter for the long term. Short-term entry will probably not be profitable if the sunk costs could not be recouped in one year and such a firm would not qualify as an uncommitted entrant.

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Merger analysis in the '90s: the guidelines and beyond - overview

Article Abstract:

The 1992 horizontal merger guidelines have both pros and cons. The pros are the slightly increased sympathy for the efficiency defense, the new section on single-firm market power and its anti-competitive potential, and the more detailed definition of entry. The cons are the overly cautious changes in relevant market analysis, the concept of 'sunk costs' which may make supply substitution or geographic diversion more difficult to use as a defense to a merger, and the added precondition for the failing company defense.

Unfair competition (Commerce), Unfair competition

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Perspectives on the 1992 U.S. government horizontal merger guidelines

Article Abstract:

The goal of the 1992 horizontal merger guidelines is to identify mergers with the potential for creating or augmenting market power. They follow the 1982 guidelines in the view that market concentration is the most important factor in assessing the competitive effects of a merger and that high concentration is more worrisome than low. The new guidelines describe in greater detail how a merger could result in higher prices or other anti-competitive practices.

Economic policy, United States. Federal Trade Commission

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