This paper is concerned with the study of durability as an aspect of competition and market structure that contributes to determining the incentives for mergers. We find that relative to the incentives in industries that produce non-durable goods the durability of the good produced by an industry enhances the incentive for mergers in the presence of intertemporal consistency problems. Further, the analysis indicates that in durable good markets a good antitrust policy should combine a restriction to rent solely with a prudent merger policy.
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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number
200403.
Length: Date of creation: 01 Jan 2004 Date of revision:
24 Nov 2008 Publication status: Published in Journal of Economic Behavior & Organization, 2008, 68, pp. 691-701 Handle: RePEc:ehu:dfaeii:200403
Order Information: Postal: Dpto. de Fundamentos del Análisis Económico II, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain Email:
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