IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v54y2006i3p397-423.html

Merger, Ease Of Entry And Entry Deterrence In A Dynamic Model

Author

Listed:
  • ANTHONY M. MARINO
  • JÁN ZÁBOJNÍK

Abstract

We analyze whether ease and speed of entry can mitigate the anti‐competititve effects of a merger, in a dynamic model of endogenous merger. In our model, if new firms can enter quickly, it is more likely that merger is motivated by efficiency as opposed to increased market power. Thus, there is less reason to challenge the merger. On the other hand, if entry of new firms becomes less costly, firms may have a stronger incentive to monopolize the industry through horizontal merger. We also show that when the incumbent can engage in entry deterrence activities, anti‐merger policy can decrease welfare.

Suggested Citation

  • Anthony M. Marino & Ján Zábojník, 2006. "Merger, Ease Of Entry And Entry Deterrence In A Dynamic Model," Journal of Industrial Economics, Wiley Blackwell, vol. 54(3), pages 397-423, September.
    • Handle: RePEc:bla:jindec:v:54:y:2006:i:3:p:397-423
    DOI: 10.1111/j.1467-6451.2006.00294.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-6451.2006.00294.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-6451.2006.00294.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Fudenberg, Drew & Tirole, Jean, 1989. "Noncooperative game theory for industrial organization: An introduction and overview," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 5, pages 259-327, Elsevier.
    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


    Cited by:

    1. Ray Chaudhuri, A., 2008. "A Dynamic Model of Endogenous Mergers and Trade Liberalization," Other publications TiSEM c5b9dd83-55cf-4bc9-9a58-f, Tilburg University, School of Economics and Management.
    2. Katz, Michael L., 2021. "Big Tech mergers: Innovation, competition for the market, and the acquisition of emerging competitors," Information Economics and Policy, Elsevier, vol. 54(C).
    3. Ramón Faulí-Oller & Joel Sandonís, 2007. "Downstream Mergers And Entry," Working Papers. Serie AD 2007-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    4. Brito, Duarte & Vasconcelos, Helder, 2024. "Can consumer surplus decrease with merger efficiencies?," Economics Letters, Elsevier, vol. 239(C).
    5. Mason, Robin & Weeds, Helen, 2013. "Merger policy, entry, and entrepreneurship," European Economic Review, Elsevier, vol. 57(C), pages 23-38.
    6. Patrice Bougette & Kai H�schelrath & Kathrin M�ller, 2014. "Do horizontal mergers induce entry? Evidence from the US airline industry," Applied Economics Letters, Taylor & Francis Journals, vol. 21(1), pages 31-34, January.
    7. Azar, José & Barriola, Xabier, 2022. "Did the MillerCoors joint venture strengthen the craft beer revolution?," International Journal of Industrial Organization, Elsevier, vol. 85(C).
    8. Sumit K. Majumdar & Rabih Moussawi & Ulku Yaylacicegi, 2014. "Do Incumbents’ Mergers Influence Entrepreneurial Entry? An Evaluation," Entrepreneurship Theory and Practice, , vol. 38(3), pages 601-633, May.
    9. Przemysław Jeziorski, 2023. "Empirical Model of Dynamic Merger Enforcement—Choosing Ownership Caps in U.S. Radio," Management Science, INFORMS, vol. 69(8), pages 4457-4480, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pierre-Pascal Gendron, 1996. "Corporation Tax Asymmetries: An Oligopolistic Supergame Analysis," Working Papers ecpap-96-04, University of Toronto, Department of Economics.
    2. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
    3. Lindbeck, Assar & Snower, Dennis J., 2003. "The Firm as a Pool of Factor Complementarities," IZA Discussion Papers 882, Institute of Labor Economics (IZA).
    4. James E. Alt & Barry Eichengreen, 1989. "Parallel And Overlapping Games: Theory And An Application To The European Gas Trade," Economics and Politics, Wiley Blackwell, vol. 1(2), pages 119-144, July.
    5. K. Conrad, 2000. "Energy Tax and Competition in Energy Efficiency: The Case of Consumer Durables," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(2), pages 159-177, February.
    6. Dan Anderberg & Carlo Perroni, "undated". "Renegotiation of Social Contracts by Majority Rule," EPRU Working Paper Series 00-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    7. Raquel Arévalo Tomé & José‐María Chamorro‐Rivas, 2007. "Credible collusion in a model of spatial competition," Papers in Regional Science, Wiley Blackwell, vol. 86(4), pages 633-642, November.
    8. Sijm, Jos & Chen, Yihsu & Hobbs, Benjamin F., 2012. "The impact of power market structure on CO2 cost pass-through to electricity prices under quantity competition – A theoretical approach," Energy Economics, Elsevier, vol. 34(4), pages 1143-1152.
    9. Mason, Charles F. & Phillips, Owen R., 2000. "Vertical integration and collusive incentives: an experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 18(3), pages 471-496, April.
    10. Harhoff, Dietmar & Wagner, Stefan, 2005. "Modelling the duration of patent examination at the European Patent Office," CEPR Discussion Papers 5283, C.E.P.R. Discussion Papers.
    11. Sexton, Richard J., 1991. "Game Theory: A Review With Applications To Vertical Control In Agricultural Markets," Working Papers 225865, University of California, Davis, Department of Agricultural and Resource Economics.
    12. Moiseeva, Ekaterina & Wogrin, Sonja & Hesamzadeh, Mohammad Reza, 2017. "Generation flexibility in ramp rates: Strategic behavior and lessons for electricity market design," European Journal of Operational Research, Elsevier, vol. 261(2), pages 755-771.
    13. David Besanko & Pierre Régibeau & Katharine E. Rockett, 2005. "A Multi‐Task Principal‐Agent Approach To Organizational Form," Journal of Industrial Economics, Wiley Blackwell, vol. 53(4), pages 437-467, December.
    14. John A. Weinberg, 1994. "Selling Federal Reserve payment services: one price fits all?," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 1-24.
    15. Ernst ten Heuvelhof & Martijn Leijten, 2013. "New Public Management and the new features of strategic behaviour," Chapters, in: Hugo Priemus & Bert van Wee (ed.), International Handbook on Mega-Projects, chapter 6, pages 111-130, Edward Elgar Publishing.
    16. Roy Weinstein & John Culbertson, 1997. "How US Antitrust Can Be On Target: The Brand-Name Prescription Drug Litigation," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 4(3), pages 257-264.
    17. Gamal Atallah, 2002. "Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 179-209.
    18. Sartzetakis, Eftichis & Xepapadeas, Anastasios & Petrakis, Emmanuel, 2008. "The role of information provision as a policy instrument to supplement environmental taxes: Empowering consumers to choose optimally," MPRA Paper 12083, University Library of Munich, Germany.
    19. Fontaine, Damien & Gaspart, Frederic & Frahan, Bruno Henry de, 2008. "Modelling the impact of private quality standards on the fresh fruit and vegetable supply chains in developing countries," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44378, European Association of Agricultural Economists.
    20. Leopold Soegner, 1998. "Regulation of a Complementary Imputed Good in a Competitive Environment," Department of Economics Working Papers wuwp056, Vienna University of Economics and Business, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:54:y:2006:i:3:p:397-423. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.