Merger remedies in frontier-based regulation
研究了合并对基于前沿基准的收入上限监管的影响，分析了三种补救措施（基准、定制、增强）如何平衡合并带来的成本节约与同行减少导致的竞争压力下降，发现增强补救措施在多种规模报酬下对消费者成本最低。
This paper contributes to the literature on mergers and frontier-based regulation. Revenue cap schemes based on frontier benchmarking can provide strong incentives for cost reduction, especially when there is a large number of low-cost peers available. Mergers can also lead to cost savings through knowledge sharing and economies of scale and scope. However, mergers may reduce the number of peers, thereby diminishing the competitive pressure generated by the benchmarking model. Therefore, regulators must balance the cost savings from mergers against the potential reduction in competitive pressure from a smaller peer group. We examine this trade-off by analyzing potential remedies that regulators might apply in the context of a merger. While mergers may yield direct efficiency gains, these are often modest compared to the broader impact on firms indirectly affected by the merger. As a result, achieving industry-wide cost reductions is difficult when both direct and indirect effects are accounted for. To explore this further, we consider three alternative remedies: baseline, customized, and augmented. These differ in the revenue targets set for newly merged firms and in how pre- and post-merger information is used in the benchmarking of non-merged firms. The overall impact on consumer costs depends on the specifics of the merger, the remedy chosen, and the assumed returns to scale. Under constant, increasing, or additive returns to scale, the augmented remedy results in the lowest cost to consumers. Nevertheless, even in these cases, consumers may still be better off without the merger.