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Endogenous mergers and maximal concentration: a note

Author

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  • Emilie Dargaud

    (University Lyon 2)

Abstract

This article examines the incentive to merge in a Bertrand competition model with generalized substitutability and price competition. The model suggests that acquisition of firms by their rivals can result in maximal concentration of the industry.

Suggested Citation

  • Emilie Dargaud, 2012. "Endogenous mergers and maximal concentration: a note," Economics Bulletin, AccessEcon, vol. 32(1), pages 137-146.
    • Handle: RePEc:ebl:ecbull:eb-11-00763
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    References listed on IDEAS

    as
    1. Ziss, Steffen, 2001. "Horizontal mergers and delegation," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 471-492, March.
    2. Farrell, Joseph & Shapiro, Carl, 1990. "Horizontal Mergers: An Equilibrium Analysis," American Economic Review, American Economic Association, vol. 80(1), pages 107-126, March.
    3. Gonzalez-Maestre, Miguel & Lopez-Cunat, Javier, 2001. "Delegation and mergers in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 19(8), pages 1263-1279, September.
    4. Gaudet, Gerard & Salant, Stephen W., 1992. "Mergers of producers of perfect complements competing in price," Economics Letters, Elsevier, vol. 39(3), pages 359-364, July.
    5. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 185-199.
    6. Hackner, Jonas, 2000. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Journal of Economic Theory, Elsevier, vol. 93(2), pages 233-239, August.
    7. Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-227, March.
    8. Morton I. Kamien & Israel Zang, 1990. "The Limits of Monopolization Through Acquisition," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 465-499.
    9. Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Partha Gangopadhyay & Jenny Zhang & Mark Zreika, 2012. "Bribe-Giving and Endogenous Partnership in Oligopolies: Some Theoretical Conjectures," Modern Applied Science, Canadian Center of Science and Education, vol. 6(4), pages 1-2, April.

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    More about this item

    Keywords

    endogenous mergers; concentration; price competition;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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