Abstract: Firms may share information to discover potential synergies between their data sets and algorithms, which eventually may lead to more efficient mergers and acquisitions (M&A) decisions. However, as pointed out by Arrow, information sharing also modifies the competitive balance when companies do not merge, and a firm may be reluctant to share information with potential rivals. Under general conditions, we show that firms beneï¬?t from (partially) sharing information. Because more sharing of information may increase the industry’s expected profits both when there is head-to-head competition and when there is an M&A, the presence of a regulator who can prevent or allow the M&A can decrease or increase the level of information sharing, as well as consumer surplus, with respect to the no-regulator case. A regulator who can also control the level of information sharing will allow firms to share information.
JEL classiﬁcation: K21, L1, L21, L24, L41, L5.
Keywords: Antitrust, incomplete information, mergers, privacy, sale of data, synergies.
The Sale of Data: Learning Synergies Before M&As