Convex Costs And The Merger Paradox Revisited
"Returning to the contention that convex costs provide a resolution to the merger paradox, we show that for reasonable degrees of convexity, the minimum market share needed for merger to be profitable remains close to that associated with linear costs. Moreover, convex costs do not eliminate the free rider problem identified as part of the merger paradox. Finally, we retain convex costs while modeling a firm-by-firm sequential merger process, showing that the paradox constrains a larger share of potential mergers. These findings help reduce the relevance of convex costs as a resolution to the merger paradox." ("JEL" L12, L13) Copyright 2006 Western Economic Association International.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 45 (2007)
Issue (Month): 2 (04)
|Contact details of provider:|| Postal: 18830 Brookhurst Street, Suite 304, Fountain Valley, CA 92708 USA|
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0095-2583
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0095-2583|