Unilateral effects screens for partial horizontal acquisitions: the generalized HHI and GUPPI

Duarte Brito, António Osório, Ricardo Ribeiro, Helder Vasconcelos

Research output: Contribution to journalArticlepeer-review

19 Citations (Scopus)


Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive effects of partial acquisitions. We propose a generalization of the two most traditional indicators used to screen unilateral anti-competitive effects - the Herfindahl–Hirschman Index and the Gross Upward Price Pressure Index - to partial horizontal acquisition settings. The proposed generalized indicators are endogenously derived under a probabilistic voting model in which the manager of each firm is elected in a shareholder assembly between two potential candidates who seek to obtain utility from an exogenous rent associated with corporate office. The model (i) can cope with settings involving all types of owners and rights: owners that can be internal to the industry (rival firms) and external to the industry; and rights that can capture financial and corporate control interests, can be direct and indirect, can be partial or full, (ii) yields an endogenous measure of the owners ultimate corporate control rights, and (iii) can also be used - in case the potential acquisition is inferred to likely enhance market power - to devise divestiture structural remedies. We also provide an empirical application of the two proposed generalized indicators to several acquisitions in the wet shaving industry, with the objective of providing practitioners with a step-by-step illustration of how to compute them in antitrust cases.

Original languageEnglish
Pages (from-to)127-189
Number of pages63
JournalInternational Journal of Industrial Organization
Publication statusPublished - 1 Jul 2018


  • Banzhaf power index
  • Corporate control
  • HHI
  • Partial horizontal acquisitions
  • Screening indicators


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