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Horizontal mergers in the circular city: a note

Author

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  • Andreea Cosnita

    (EUREQua - University Paris I)

Abstract

Two-firm horizontal Cournot mergers give rise to multi-plant firms in spatial markets. We study location equilibria on the circle for competition between a two-store merged entity and one then two single-store competitors. Several results turn up. First of all, we get equilibrium location patterns that could not have been obtained on the segment. Secondly, we investigate the profitability of such mergers and find that they turn out to be unprofitable much earlier.

Suggested Citation

  • Andreea Cosnita, 2005. "Horizontal mergers in the circular city: a note," Economics Bulletin, AccessEcon, vol. 12(7), pages 1-10.
    • Handle: RePEc:ebl:ecbull:eb-04l10046
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    Cited by:

    1. Andreea Cosnita-Langlais, 2014. "Where to locate to escape predation?," Economics Bulletin, AccessEcon, vol. 34(2), pages 614-626.
    2. Cosnita-Langlais, Andreea, 2012. "Horizontal market concentration: Theoretical insights from spatial models," Research in Economics, Elsevier, vol. 66(1), pages 22-32.
    3. Larch, Mario & Lechthaler, Wolfgang, 2008. "Multinational firms and heterogeneous labor," Kiel Working Papers 1454, Kiel Institute for the World Economy (IfW Kiel).
    4. Egger, Hartmut & Egger, Peter, 2010. "The trade and welfare effects of mergers in space," Regional Science and Urban Economics, Elsevier, vol. 40(4), pages 210-220, July.
    5. Andreea Cosnita-Langlais, 2011. "Cournot competition in spatial markets: a complementary result on complementarity," Economics Bulletin, AccessEcon, vol. 31(3), pages 2454-2467.

    More about this item

    Keywords

    circular city;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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