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Sequential Mergers With Differing Differentiation Levels

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  • TAKESHI EBINA
  • DAISUKE SHIMIZU

Abstract

We study sequential merger incentives under presence of product differentiation. Two sets of firms produce closely related goods, whereas each set produces more differentiated goods. Merger incentives under product differentiation are found to be stronger for two firms producing closely related goods than more differentiated goods. Also, after one merger, other firms are willing to follow with their own merger, resulting in sequential mergers. This result is consistent with the recent mergers in the video game software industry in Japan. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd/University of Adelaide and Flinders University.

Suggested Citation

  • Takeshi Ebina & Daisuke Shimizu, 2009. "Sequential Mergers With Differing Differentiation Levels ," Australian Economic Papers, Wiley Blackwell, vol. 48(3), pages 237-251, September.
  • Handle: RePEc:bla:ausecp:v:48:y:2009:i:3:p:237-251
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    References listed on IDEAS

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    Cited by:

    1. Sergio Currarini & Marco A. Marini, 2015. "Coalitional Approaches to Collusive Agreements in Oligopoly Games," Manchester School, University of Manchester, vol. 83(3), pages 253-287, June.
    2. Fikru, Mahelet G. & Gautier, Luis, 2016. "Mergers in Cournot markets with environmental externality and product differentiation," Resource and Energy Economics, Elsevier, vol. 45(C), pages 65-79.

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