Fight cartels or control mergers? On the optimal allocation of enforcement efforts within competition policy

► Firms choose between horizontal mergers and cartels to coordinate on the market. ► Competition agencies split their budget between merger control and cartel fighting. ► We study the optimal competition policy mix between these two antitrust branches. ► The agency will enforce both except for a very large merger coordinated effect. ► Then it will stop controlling mergers and spend the whole budget against cartels.