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Myopic Mergers across Borders with Incomplete Information in GOLE

Author

Listed:
  • Beladi Hamid
  • Hollas Daniel

    (College of Business, University of Texas at San Antonio, San Antonio, TX78249, USA)

  • Chakrabarti Avik

    (Department of Economics, University of Wisconsin, Milwaukee, WI, USA)

Abstract

In this paper, we present a tractable general equilibrium model capturing the incentives for myopic mergers in oligopolistic industries with incomplete information about rivals’ costs. We demonstrate that ex-ante gains from myopic mergers between firms with incomplete information about rival’s cost are larger when the difference between unknown components of their costs is wider. We also show that ex-ante gains from myopic mergers between firms across countries with large differences in factor endowments, ceteris paribus, would be greater than the ex-ante gains from mergers between countries with relatively similar factor endowments.

Suggested Citation

  • Beladi Hamid & Hollas Daniel & Chakrabarti Avik, 2019. "Myopic Mergers across Borders with Incomplete Information in GOLE," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(4), pages 1-4, October.
    • Handle: RePEc:bpj:bejeap:v:19:y:2019:i:4:p:4:n:12
    DOI: 10.1515/bejeap-2019-0281
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    References listed on IDEAS

    as
    1. Beladi, Hamid & Chakrabarti, Avik, 2019. "Multidivisional firms, internal competition, and comparative advantage: Baye et al. Meet Neary," Journal of International Economics, Elsevier, vol. 116(C), pages 50-57.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Cross-border mergers; General Oligopolistic Equilibrium; Incomplete information; Oligopoly;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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