South African Journal of Economic and Management Sciences
On-line version ISSN 2222-3436
Print version ISSN 1015-8812
MNCUBE, Liberty; RATSHISUSU, Hardin and DLAMINI, Bhekithemba. On merger simulation and its potential role in South African merger control. S. Afr. j. econ. manag. sci. [online]. 2010, vol.13, n.1, pp.62-75. ISSN 2222-3436.
This paper simulates the price effects of the proposed Ferro Industrial Products (Ferro) and Powder-Lak merger in order to suggest the role that merger simulation models should play in South African merger control. Merger simulation can provide support to the Commission's analysis by: focusing parties' attentions on verifiable economic arguments; making transparent the values of the key parameters and assumptions in the Commission's analysis; producing quantitative estimates of the results of a given transaction; and indicating the amount of resources to allocate to proposed merger cases. However, it offers only one piece of evidence in a case and its results must be interpreted with an understanding of the potential limitations.
Keywords : Merger simulation.