This paper models a sequential merger formation game with endogenous efficiency gains in
which every merger has to be submitted for approval to the Antitrust Authority (AA). Two
different types of AA are studied: first, a myopic AA, which judges a given merger without
considering that subsequent mergers may occur; and, second, a forward looking AA, which
anticipates the ultimate market structure a given merger will lead to. By contrasting the
decisions of these two types of AA, merger policy implications can be drawn. In particular …