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Bundling and Mergers in Energy Markets

  • Granier, Laurent
  • Podesta, Marion

Does bundling trigger mergers in energy industries? We observe mergers between firms belonging to various energy markets, for instance between gas and electricity providers. These mergers enable firms to bundle. We consider two horizontally differentiated markets. In this framework, we show that bundling strategies in energy markets create incentives to form multi-market firms in order to supply bi-energy packages. Moreover, we find that this type of merger is detrimental to social welfare.

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Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 32 (2010)
Issue (Month): 6 (November)
Pages: 1316-1324

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Handle: RePEc:eee:eneeco:v:32:y:2010:i:6:p:1316-1324
Contact details of provider: Web page: http://www.elsevier.com/locate/eneco

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