Welfare-Enhancing Mergers Under Product Differentiation
AbstractIn this paper we consider a model of duopoly with differentiated products to examine the welfare effects of a merger between two asymmetric firms. We find that, for quantity competition, the parameter range for welfare-enhancing merger widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices. Copyright � 2010 The Authors. Journal compilation � 2010 Blackwell Publishing Ltd and The University of Manchester.
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Bibliographic InfoArticle provided by University of Manchester in its journal The Manchester School.
Volume (Year): 78 (2010)
Issue (Month): 4 (07)
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Other versions of this item:
- Flavio Menezes & Tina Kao, 2007. "Welfare Enhancing Mergers under Product Differentiation," Discussion Papers Series 350, School of Economics, University of Queensland, Australia.
- Tina Kao & Flavio Menezes, 2009. "Welfare Enhancing Mergers Under Product Differentiation," ANU Working Papers in Economics and Econometrics 2009-508, Australian National University, College of Business and Economics, School of Economics.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
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