Profitable Horizontal Mergers without Cost Advantages: The Role of Internal Organization, Information, and Market Structure
AbstractMerged firms are typically rather complex organizations. Accordingly, merger has a more profound effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare-improving even if costs are linear. The driving force behind these results, which help to reconcile theory with various empirical findings, is the assumption that information about output decisions flows more freely within a merged firm.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 435.
Date of creation: 2001
Date of revision:
Merger; internal organizational structure; information; timing; market structure;
Other versions of this item:
- Steffen Huck & Kai A. Konrad & Wieland Müller, 2004. "Profitable Horizontal Mergers without Cost Advantages: The Role of Internal Organization, Information and Market Structure," Economica, London School of Economics and Political Science, vol. 71(284), pages 575-587, November.
- Huck, S. & Konrad, K.A. & Müller, W., 2004. "Profitable horizontal mergers without cost advantage: The role of intenal organization, information and market structure," Open Access publications from Tilburg University urn:nbn:nl:ui:12-143121, Tilburg University.
- Huck, Steffen & Konrad, Kai A. & Müller, Wieland, 2001. "Profitable horizontal mergers without cost advantages: The role of internal organization, information, and market structure," Discussion Papers, various Research Units FS IV 01-05, Social Science Research Center Berlin (WZB).
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
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