- Delegation And Mergers In Oligopoly
AbstractIn this paper we analyze the effect strategic delegation on the profitability of mergers in the context of a Cournot oligopoly with linear demand and cost functions. It is assumed that, after the merging process is completed, the owner of every independent firm decides its managerial incentive for his manager. We show that the required fraction of merging firms for a merger to be profitable, in our model with delegation, is substantially smaller that without delegation.
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Bibliographic InfoPaper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 1999-03.
Length: 9 pages
Date of creation: Mar 1999
Date of revision:
Publication status: Published by Ivie
Strategic Delegation; Mergers; Cournot Oligopoly;
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