The Informational Advantages or Disadvantages of Horizontal Mergers
AbstractThe author's goal is to predict whether horizontal mergers can gene rate informational advantages to firms facing a stochastic market. At the Cournot equilibrium, each nonmerging firm benefits from an informational advantage that exceeds the informational advantage (if it exists) of each merging firm. More over, if signals are highly correlated compared with the precision of private signals, and if the number of colluding firms is small relative to the whole market, an informational disadvantage is impose d on each firm that colludes. At the Bertrand equilibrium, the informational advantage of each merging firm exceeds the informational advantage of each nonmerging firm, and the latter is positive. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 29 (1988)
Issue (Month): 4 (November)
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- Thomas Borek & Stefan Buehler & Armin Schmutzler, 2002.
"Weddings with Uncertain Prospects – Mergers under Asymmetric Information,"
SOI - Working Papers
0213, Socioeconomic Institute - University of Zurich, revised Feb 2004.
- Borek, Thomas & Bühler, Stefan & Schmutzler, Armin, 2003. "Weddings with Uncertain Prospects - Mergers under Asymmetric Information," CEPR Discussion Papers 3839, C.E.P.R. Discussion Papers.
- Röller, Lars-Hendrik & Stennek, Johan & Verboven, Frank, 2000.
"Efficiency Gains from Mergers,"
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543, Research Institute of Industrial Economics.
- Qiu, Larry D. & Zhou, Wen, 2006. "International mergers: Incentives and welfare," Journal of International Economics, Elsevier, vol. 68(1), pages 38-58, January.
- Mariana Cunha & Paula Sarmento & Hélder Vasconcelos, 2014. "Uncertain Efficiency Gains and Merger Policy," FEP Working Papers 527, Universidade do Porto, Faculdade de Economia do Porto.
- Le Pape, Nicolas & Zhao, Kai, 2013. "Horizontal mergers and uncertainty," Economics Discussion Papers 2013-62, Kiel Institute for the World Economy.
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