This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Waterbed Effects and Buyer Mergers

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Adrian Majumdar () (Centre for Competition Policy, University of East Anglia and RBB Economics)
Abstract

This paper demonstrates how a profitable, downstream merger can lower the merged entity's input price while raising that of its rivals, leading to an adverse effect on final consumers. This novel 'waterbed' result is surprising and very different to the unilateral and co-ordinated effects usually considered in the analysis of horizontal mergers. When demand is linear, all mergers involving a powerful buyer harm overall welfare even though the merger leads to marginal cost reductions that substantially increase output by the merged entity.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.ccp.uea.ac.uk/publicfiles/workingpapers/CCP05-7.pdf
Our checks indicate that this address may not be valid because: 500 Can't connect to ccpweb.mgt.uea.ac.uk:80 (connect: timeout) (http://www.ccp.uea.ac.uk/publicfiles/workingpapers/CCP05-7.pdf [302 Found]--> http://ccpweb.mgt.uea.ac.uk/publicfiles/workingpapers/CCP05-7.pdf). If this is indeed the case, please notify (Cheryl Whittkaer)
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 05-7.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 25 pages
Date of creation: Jun 2005
Date of revision:
Handle: RePEc:ccp:wpaper:wp05-07

Contact details of provider:
Postal: Norwich, NR4 7TJ
Phone: +44(0)1603 593715
Fax: +44(0)1603 591622
Email:
Web page: http://www.ccp.uea.ac.uk
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Cheryl Whittkaer).

Related research
Keywords: Mergers; buyer power; raising rivals' costs;

Find related papers by JEL classification:
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection

Statistics
Access and download statistics

Did you know? Over five million full texts a year are downloaded through IDEAS.

This page was last updated on 2009-12-22.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.