Monopolisation of triopoly – revisited
The main objective of this paper is to provide a new insight into the possibility of monopolising a three-firm industry through acquisition of rivals in the absence of restrictions imposed by the antitrust authorities. The dynamic model of monopolisation under Cournot-type rivalry among oligopolists implies that the monopolisation through acquisition is not profitable because of the free riding among the owners of firms. However, in a model of triopoly where the acquirer could become the market leader of the Stackelberg type, we show that a single buyer can monopolise an industry through acquisition of rivals. It means that the monopolisation of triopoly may not be prevented by the market alone. This finding has an important regulatory implication different from the results of the previous models: an active intervention of antitrust authorities in the market with only three firms is necessary to block mergers and acquisitions.
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): 1 (2009)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.inderscience.com/browse/index.php?journalID==311 |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kamien, Morton I & Zang, Israel, 1990.
"The Limits of Monopolization through Acquisition,"
The Quarterly Journal of Economics,
MIT Press, vol. 105(2), pages 465-99, May.
- Morton I. Kamien & Israel Zang, 1988. "The Limits of Monopolization Through Acquisition," Discussion Papers 802, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Morton I. Kamien & Israel Zang, 1987. "The Limits of Monopolization Through Acquisition," Discussion Papers 754, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, August.
- Kamien, Morton I & Zang, Israel, 1993. "Monopolization by Sequential Acquisition," Journal of Law, Economics and Organization, Oxford University Press, vol. 9(2), pages 205-29, October.
- Hennessy, David A., 2000.
"Cournot Oligopoly Conditions Under Which Any Horizontal Merger is Profitable,"
Staff General Research Papers
1699, Iowa State University, Department of Economics.
- David Hennessy, 2000. "Cournot Oligopoly Conditions under which Any Horizontal Merger Is Profitable," Review of Industrial Organization, Springer, vol. 17(3), pages 277-284, November.
- Mihkel M. Tombak, 2002. "Mergers to Monopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 513-546, 09.
- Harris, Ellie G, 1994. "Why One Firm Is the Target and the Other the Bidder in Single-Bidder, Synergistic Takeovers," The Journal of Business, University of Chicago Press, vol. 67(2), pages 263-80, April.
- Prokop, Jacek, 2005. "Monopolization through acquisition," MPRA Paper 43683, University Library of Munich, Germany, revised 2006.
When requesting a correction, please mention this item's handle: RePEc:ids:ijcome:v:1:y:2009:i:2:p:113-125. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.