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MERGERS IN ASYMMETRIC STACKELBERG MARKETS

It is well known that the profitability of horizontal mergers with quantity competition is scarce. However, in an asymmetric Stackelberg market we obtain that some mergers are profitable. Our main result is that mergers among followers become profitable when the followers are inefficient enough. In this case, leaders reduce their output when followers merge and this reduction renders the merger profitable. This merger increases price and welfare is reduced.
Year of publication:
2007-05
Authors: Faulí-Oller, Ramón ; Escrihuela, Marc
Institutions: Instituto Valenciano de Investigaciones Económicas (IVIE)
Subject: Mergers | Asymmetries | Stackelberg
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Language: English
Notes:
Published by Ivie 16 pages
Classification: L13 - Oligopoly and Other Imperfect Markets ; L40 - Antitrust Policy. General ; L41 - Monopolization; Horizontal Anticompetitive Practices
Source:
Persistent link: https://www.econbiz.de/10005515890
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