We reexamine the profitability and social efficiency of horizontal mergers in a Cournot oligopoly with decreasing average costs. Assuming the merger allows for efficiency gains in production, we identify the conditions under which the merger is, respectively, profitable and socially desirable....

We characterize the interplay between firm's decisions in product development, be it joint or independent, and their ensuing repeated price behaviour, either collusive or Bertrand-Nash. We prove that joint-product development and the resulting lack of horizontal differentiation may destabilise...

In an oligopoly supergame, firms' actions in prices and quantities are subject to non-negativity constraints. These constraints can obstruct the practicability of optimal punishment (a la Abreu (1986), Lambson (1987), and Hackner (1996)) in sustaining tacit collusion. Noting that the prospect of...

In an oligopoly supergame, firms face an obvious technological constraint: the positivity of their production quantities. WE show that Lambson's (1987) result on "security-level punishment", that the single-period punishment makes the firm's discounted participation condition just bind, holds...

This paper investigates the endogenous choice between price- and quantity-setting behaviour in a duopoly game where firms invest in product development first, and then play a marketing game later. Only in the initial R&D stage, the two firms set up a joint venture in order to share the costs of...