The Incentives for Takeover in Oligopoly
Abstract
This Paper presents a model of takeover incentives in an oligopolistic industry, which, in contrast to previous approaches, takes both insiders' and outsiders' gains from an increase in industry concentration into account. Our main application is to compare takeover incentives in a differentiated Cournot and Bertrand oligopoly model with linear demand and costs. We provide a complete analysis for arbitrary numbers of firms, complements and substitutes, and degrees of product differentiation. An increase in concentration is more likely under Cournot competition if products are complements and more likely under Bertrand competition if products are substitutes. Moreover, as products become closer substitutes, a takeover becomes more likely under Bertrand and less likely under Cournot competition.Download Info
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Bibliographic Info
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3163.Length:
Date of creation: Jan 2002
Date of revision:
Handle: RePEc:cpr:ceprdp:3163
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Related research
Keywords: merger; oligopoly; takeover bidding;Other versions of this item:
- Inderst, Roman & Wey, Christian, 2004. "The incentives for takeover in oligopoly," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1067-1089, November.
- Roman Inderst & Christian Wey, 2004. "The Incentives for Takeover in Oligopoly," Discussion Papers of DIW Berlin 423, DIW Berlin, German Institute for Economic Research.
- Roman Inderst & Christian Wey, 2001. "The Incentives for Takeover in Oligopoly," CIG Working Papers FS IV 01-24, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-14 (All new papers)
- NEP-MIC-2003-03-14 (Microeconomics)
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Roberto Burguet & Ramon Caminal, 2012.
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- repec:ebl:ecbull:v:4:y:2008:i:14:p:1-5 is not listed on IDEAS
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