Why use Cournot model for mergers?

The Cournot model is used for analyzing mergers because it provides a framework for understanding how firms compete in quantities rather than prices. By assuming firms choose output levels simultaneously, the model allows for the evaluation of how a merger can affect market equilibrium, pricing, and overall welfare. Additionally, it helps in assessing potential anti-competitive outcomes by illustrating changes in market power and output levels post-merger. This analysis is crucial for regulatory bodies when evaluating the implications of mergers on competition.