Oligopoly and the Incentive for Horizontal Merger
Loading...
View/Download File
Persistent link to this item
Statistics
View StatisticsJournal Title
Journal ISSN
Volume Title
Title
Oligopoly and the Incentive for Horizontal Merger
Authors
Published Date
1983-11
Publisher
Center for Economic Research, Department of Economics, University of Minnesota
Type
Working Paper
Abstract
In order to talk about merger, one needs some
notion of assets or capital which can be combined, and one
must allow for asymmetry in the equilibrium to reflect such.
Using a simple notion of capital with linear marginal cost
and linear demand, we show in two types of models when there
is and when there is not an incentive to merge. Merger
results in an increase in the equilibrium price to the
benefit of all firms. However, this price increase arises
primarily because the output of the merged firm is lower
after the merger than the combined output of its partners
prior to merger. We show how the profitability of merger
depends upon both the structural and behavioral parameters
of the model.
Keywords
Description
Related to
Replaces
License
Series/Report Number
Discussion Paper
190
190
Funding information
Isbn identifier
Doi identifier
Previously Published Citation
Perry, M.K. and Porter, R.H., (1983), "Oligopoly and the Incentive for Horizontal Merger", Discussion Paper No. 190, Center for Economic Research, Department of Economics, University of Minnesota.
Other identifiers
Suggested citation
Perry, Martin K.; Porter, Robert H.. (1983). Oligopoly and the Incentive for Horizontal Merger. Retrieved from the University Digital Conservancy, https://hdl.handle.net/11299/55343.
Content distributed via the University Digital Conservancy may be subject to additional license and use restrictions applied by the depositor. By using these files, users agree to the Terms of Use. Materials in the UDC may contain content that is disturbing and/or harmful. For more information, please see our statement on harmful content in digital repositories.