Mergers in asymmetric Stackelberg markets

  1. Escrihuela-Villar, Marc
  2. Faulí-Oller, Ramon
Aldizkaria:
Spanish economic review

ISSN: 1435-5469

Argitalpen urtea: 2008

Alea: 10

Zenbakia: 4

Orrialdeak: 279-288

Mota: Artikulua

DOI: 10.1007/S10108-007-9038-Y DIALNET GOOGLE SCHOLAR

Beste argitalpen batzuk: Spanish economic review

Laburpena

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.

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