Advanced Search
MyIDEAS: Login to save this paper or follow this series

Mergers In A Partially Cartelized Market

Contents:

Author Info

  • Marc Escrihuela

    ()
    (Universidad de Alicante)

Registered author(s):

    Abstract

    The paper studies a Partial Cartel model where only a subset of firms colludes. In this model, firms' ability to collude depends on the discount factor. In addition, as hardly any attention has been given by the literature to the case where mergers take place in a collusive framework, the purpose of this paper is to analyze the competitive effects of horizontal mergers on profits and welfare in a Partially Cartelized market. We show that both mergers among fringe and cartel firms increase market price. Regarding merger profitability, the discount factor decreases cartel members' merger profitability. However, the higher cartel members' discount factor, the more fringe firms will be willing to merge. An example of this could be the intense wave of mergers among oil firms that coincided with a large period of high oil prices caused by the OPEC production cuts.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. 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.ivie.es/downloads/docs/wpasad/wpasad-2003-29.pdf
    File Function: Fisrt version / Primera version, 2003
    Download Restriction: no

    Bibliographic Info

    Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie AD with number 2003-29.

    as in new window
    Length: 27 pages
    Date of creation: Aug 2003
    Date of revision:
    Publication status: Published by Ivie
    Handle: RePEc:ivi:wpasad:2003-29

    Contact details of provider:
    Postal: C/ Guardia Civil, 22, Esc 2a, 1o, E-46020 VALENCIA
    Phone: +34 96 319 00 50
    Fax: +34 96 319 00 55
    Email:
    Web page: http://www.ivie.es/
    More information through EDIRC

    Related research

    Keywords: collusion; partial cartels; trigger strategies;

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Sylvie Thoron, 1998. "Formation of a Coalition-Proof Stable Cartel," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 63-76, February.
    2. Huck, Steffen & Konrad, Kai A. & Muller, Wieland, 2001. "Big fish eat small fish: on merger in Stackelberg markets," Economics Letters, Elsevier, vol. 73(2), pages 213-217, November.
    3. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, December.
    4. Davidson, Carl & Deneckere, Raymond, 1984. "Horizontal mergers and collusive behavior," International Journal of Industrial Organization, Elsevier, vol. 2(2), pages 117-132, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Pedro Mendi & Róbert F. Veszteg, . "Sustainability of Collusion: Evidence from the Late 19th Century Basque Iron and Steel Industry," Faculty Working Papers 04/07, School of Economics and Business Administration, University of Navarra.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ivi:wpasad:2003-29. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Departamento de Edición).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.