Welfare Enhancing Mergers Under Product Differentiation

This paper considers a model of duopoly with differentiated products to examine the welfare effects of a merger between two asymmetric firms. We find that for quantity competition, the parameter range for welfare enhancing merger widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices.

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Year of publication:	2009-10
Authors:	Kao, Tina ; Menezes, Flavio
Institutions:	College of Business and Economics, Australian National University

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Extent:	application/pdf
Series:	ANU Working Papers in Economics and Econometrics.
Type of publication:	Book / Working Paper
Notes:	14 pages longPages
Classification:	L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L12 - Monopoly; Monopolization Strategies
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008518851