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Competition authorities try to mitigate negative distortionary effects on the
markets by tackling abuse of market power or cartels and by controlling mergers. This
study attempts to assess the impact of these endeavours by going beyond calculations
of lumpsum effects on consumer surplus. We revise the simulation of Van Sinderen
and Kemp (Economist 156(4):365–385, 2008) who use a cut in income taxes as a
modelling device to simulate the impact of anti cartel policies. Our approach avoids
attributing effects caused purely by changes in taxation to market power and uses
changes in the Lerner index as the impuls. We have updated the model to enable
simulating the impact of competition policies on productivity and R&D in order to
get a balanced view on the effects. We find that the re-distribution of surplus from
producers to consumers supported by ACM in this new setting is likely to have a
positive effect on productivity, GDP, wages and consumption, and a small positive
effect on employment. This differs from the outcome of Van Sinderen and Kemp,
who did not find a positive impact on productivity, due to an overestimation of the
employment growth