We study the incentives towards horizontal merger among firms when the amount of capital is the strategic variable. The type of firms we focus on is workers' cooperatives, but our conclusions apply also to employment-constrained profit maximisers. Within a simple oligopoly model, we prove that...

We investigate the feasibility of horizontal mergers in a homogeneous triopoly where firms compete in quantities and production is polluting the environment. We show that the degree of alignment between private and social incentives increases in the intensity of pollution