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Merger and Collusion in Contests

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  • Steffen Huck
  • Kai A. Konrad
  • Wieland Müller

Abstract

Competition in some product markets takes the form of a contest. If some firms cooperate in such markets, they must decide how to allocate effort on each of their products and whether to reduce the number of their products in the competition. We show how this decision depends on the convexity properties of the contest success function, and we characterize conditions under which cooperation is profitable.

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Bibliographic Info

Article provided by Mohr Siebeck, Tübingen in its journal Journal of Institutional and Theoretical Economics.

Volume (Year): 158 (2002)
Issue (Month): 4 (December)
Pages: 563-

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Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200212)158:4_563:macic_2.0.tx_2-z

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Citations

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Cited by:
  1. Krakel, Matthias & Sliwka, Dirk, 2006. "Strategic delegation and mergers in oligopolistic contests," Journal of Economics and Business, Elsevier, vol. 58(2), pages 119-136.
  2. Martin Grossmann & Helmut Dietl, 2012. "Asymmetric contests with liquidity constraints," Public Choice, Springer, vol. 150(3), pages 691-713, March.
  3. Clark, Derek J. & Foros, Øystein & Sand, Jan Yngve, 2009. "Foreclosure in contests," Discussion Papers 2008/27, Department of Business and Management Science, Norwegian School of Economics.
  4. Huck, S. & Konrad, K.A. & Müller, W., 2005. "Merger Without Costs Advantage," Discussion Paper 2005-019, Tilburg University, Tilburg Law and Economic Center.
  5. Onderstal, A.M., 2002. "Socially Optimal Mechanisms," Discussion Paper 2002-34, Tilburg University, Center for Economic Research.
  6. Konrad, Kai A., 2007. "Strategy in contests: an introduction," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).

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