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There may be no pass through of a merger-related cost efficiency

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  • Harrington, Joseph E.

Abstract

When it is uncertain that a merger will have a cost-reducing efficiency and, should it materialize, the efficiency is private information to the merged firm, equilibrium prices may be at a level corresponding to the absence of the efficiency. In that case, none of the efficiency is passed to consumers.

Suggested Citation

  • Harrington, Joseph E., 2021. "There may be no pass through of a merger-related cost efficiency," Economics Letters, Elsevier, vol. 208(C).
    • Handle: RePEc:eee:ecolet:v:208:y:2021:i:c:s016517652100327x
    DOI: 10.1016/j.econlet.2021.110050
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    References listed on IDEAS

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    Cited by:

    1. Wang, X. Henry & Zhao, Jingang, 2022. "Merger effects in asymmetric and differentiated Bertrand oligopolies," Mathematical Social Sciences, Elsevier, vol. 120(C), pages 37-49.

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    Keywords

    Merger; Efficiency; Pass through;
    All these keywords.

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