The price effects of a partial acquisition may be far more complex than those of a full merger. The discussion on this issue, however, has not been well developed in Asian countries, including Korea. However, a partial acquisition case occurred in Korea in which Essilor intended to acquire fifty-percent shares of its competitor, DM Optical. In this paper, we modify and reorganize theories of upward pricing pressure (UPP) in partial acquisitions and apply them to this case. This paper, therefore, intends not only to initiate a discussion, but also to suggest an exemplary method to conduct UPP analysis in partial acquisition environments. Specifically, it will contribute to methodological advances by analyzing the case in a fashion that circumvents limitations of time and data, the main obstacles merger reviewers often face, in practice.
This paper investigates oil refiners' conduct in the Korean gasoline market. Specifically, I examine which of two modes of conduct, Bertrand-Nash competition or collusion, better fits the data. Unlike previous literature, this paper employs a differentiated product approach to address the stylized discrepancy in refiners' brands' prices: stable stratification of prices among refiners, but an unlikely equilibrium outcome in the homogenous goods market. Correct understanding of refiners' conduct is important because appropriate policy responses to collusion differ significantly from appropriate responses to competition-driven outcomes. The results of this paper support the hypothesis that Bertrand-Nash competition better explains refiners' conduct.
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