Endogenous mergers in concentrated markets
This paper proposes an approach for predicting the pattern of mergers when different mergers are feasible. It generalizes the traditional IO approach, employing ideas on coalition-formation from cooperative game theory. The model suggests that in concentrated markets, mergers are conductive to market structures with large industry profits, and thus points to a conflict between private and social incentives. It is shown how mergers may be undertaken in order to preempt other possible, and socially more desirable, mergers. The model also throws light on the formation of research joint ventures and tariff-jumping foreign direct investment.
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- Persson, Lars & Horn, Henrik, 1998.
"Endogenous Mergers in Concentrated Markets,"
Working Paper Series
513, Research Institute of Industrial Economics.
- Yi, Sang-Seung, 1997. "Stable Coalition Structures with Externalities," Games and Economic Behavior, Elsevier, vol. 20(2), pages 201-237, August.
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- Morton I. Kamien & Israel Zang, 1988.
"Competitively Cost Advantageous Mergers and Monopolization,"
799, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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- Ray, D. & Vohra, R., 1996.
"A Theory of Endogenous Coalition Structure,"
68, Boston University - Industry Studies Programme.
- Fridolfsson, Sven-Olof & Stennek, Johan, 1999.
"Why Mergers Reduce Profits, and Raise Share Prices,"
Working Paper Series
511, Research Institute of Industrial Economics, revised 03 Dec 2001.
- Fridolfsson, Sven-Olof & Stennek, Johan, 2000. "Why Mergers Reduce Profits, and Raise Share-Prices," CEPR Discussion Papers 2357, C.E.P.R. Discussion Papers.
- Nilssen, T. & Sorgard, L., 1995.
"Sequential Horizontal Mergers,"
30/1995, Oslo University, Department of Economics.
- Gaudet, Gerard & Salant, Stephen W., 1992. "Mergers of producers of perfect complements competing in price," Economics Letters, Elsevier, vol. 39(3), pages 359-364, July.
- Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-27, March.
- Joseph Farrell & Carl Shapiro, 1990. "Asset Ownership and Market Structure in Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 275-292, Summer.
- Hart, Sergiu & Kurz, Mordecai, 1983. "Endogenous Formation of Coalitions," Econometrica, Econometric Society, vol. 51(4), pages 1047-64, July.
- repec:oup:qjecon:v:105:y:1990:i:2:p:465-99 is not listed on IDEAS
- Greenberg, Joseph, 1994. "Coalition structures," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 2, chapter 37, pages 1305-1337 Elsevier.
- Persson, Lars, 1998. "The Auctioning of a Failing Firm," Working Paper Series 514, Research Institute of Industrial Economics.
- Barros, Pedro Pita, 1998. "Endogenous mergers and size asymmetry of merger participants," Economics Letters, Elsevier, vol. 60(1), pages 113-119, July.
- Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
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