Tuesday, February 5, 2008

Me Quoth DeLong Quoth Tabarrok Quoth Google

I saw this the other day, but until I read it on DeLong's website, I didn't really read it, but I get what Tabarrok is saying he says (through DeLong):
Alex Tabarrok observes that if Microsoft-Yahoo really were anticompetitive and likely to generate monopoly rents for the merged entity, Google would be being very quiet right now:
Marginal Revolution: Antitrust Protectionism: Best evidence that the merger between Microsoft and Yahoo will increase competition?
Publicly, Google came out against the deal, contending in a statement that the pairing, proposed by Microsoft on Friday in the form of a hostile offer, would pose threats to competition that need to be examined by policy makers around the world.
In other words, if buying Yahoo reduces competition, then Google and Microsoft-Yahoo would split rents from it, and thus gain from the purchase. That's the basic result from moving towards monopoly - the two duopolists get the higher rents. But Google hates it, suggesting Google is harmed by it, suggesting this is more competitive maybe.

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