Horizontal mergers for buyer power

  1. Bru Martínez, Lluís
  2. Faulí Oller, Ramon
Journal:
Working papers = Documentos de trabajo: Serie AD

Year of publication: 2003

Issue: 32

Type: Working paper

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Abstract

Salant et al. (1983) showed in a Cournot setting that horizontal mergers are unprofitable because outsiders react by increasing their output. We show that this negative effect may be compensated by the positive effect that horizontal mergers have on the buyer power of merging firms in input markets.

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