Evaluating merger price effects – Oslo Economics receives research funding from the Norwegian Competitions Authority
Oslo Economics receives funding for the research project “An ex-post analysis of merger price effects: The case of the Telia/Tele2 merger in the Norwegian market for mobile telecommunications” from the Norwegian Competition Authority’s general price regulation fund.
Mergers can lead to both higher and lower prices. Prices may increase due to increased market power, and they can decrease because of efficiency gains (which reduce marginal costs and in turn prices). Since higher prices reduce consumer welfare, considerations of which of these effects dominates are at the heart of competition policy.
The project aims to quantitatively evaluate the price effects for the involved firms of the merger between TeliaSonera (now Telia) and Tele2 in the Norwegian telecommunication market in February 2015. The research will provide an empirical evaluation of the authority’s policy (the authority cleared the merger with conditions) and increase its transparency. The project will also shed light on how the outcomes correspond to those expected from the ex-ante analysis and provide insights that can be used in future policy decisions.
Oslo Economics has received funding from the Norwegian Competition Authority on two past occasions for developing tools for ex-ante merger analysis. The first research project led to a publication in Review of Industrial Organization (link), results from the second project are available in working paper format (link).
Further information can be found at the webpages of the Norwegian Competition Authority.