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Stability analysis of horizontal mergers in a market with asymmetric substitutability

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  • Takeda, Kohei
  • Hosoe, Toyoki
  • Watanabe, Takayuki
  • Matsubayashi, Nobuo

Abstract

This study analyzes the stability of horizontal mergers in a Cournot oligopoly market. Although many researchers have addressed this issue, most previous studies assume symmetric firms in terms of demand and cost structures due to analytical tractability. We attempt to find a stable merger in a general n-firm oligopoly in which we allow for asymmetric substitutability between firms. To ensure analytical tractability, we follow the related literature and employ a simple core allocation for a monopoly merger as a stability concept.

Suggested Citation

  • Takeda, Kohei & Hosoe, Toyoki & Watanabe, Takayuki & Matsubayashi, Nobuo, 2018. "Stability analysis of horizontal mergers in a market with asymmetric substitutability," Mathematical Social Sciences, Elsevier, vol. 96(C), pages 73-84.
  • Handle: RePEc:eee:matsoc:v:96:y:2018:i:c:p:73-84
    DOI: 10.1016/j.mathsocsci.2018.09.004
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    1. Aymeric Lardon, 2019. "On the coalitional stability of monopoly power in differentiated Bertrand and Cournot oligopolies," Theory and Decision, Springer, vol. 87(4), pages 421-449, November.

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