A note on mergers and relocation
Posada and Straume (J Econ 83:243–265, 2004 ) analyze a three-firm model of a circular city where two of the firms merge and may choose to relocate. They propose an equilibrium with relocation where taking part in the merger yields higher profits than staying outside, i.e., relocation may solve the so-called merger paradox. In this note, it is shown that the equilibrium candidate considered is not an equilibrium. Copyright Springer-Verlag 2012
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- Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
- Levy, David T & Reitzes, James D, 1992. "Anticompetitive Effects of Mergers in Markets with Localized Competition," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(2), pages 427-40, April.
- Pedro Posada & Odd Rune Straume, 2004.
"Merger, Partial Collusion and Relocation,"
Journal of Economics,
Springer, vol. 83(3), pages 243-265, December.
- Posada, Pedro & Odd Rune Straume, 2003. "Merger, partial collusion and relocation," Royal Economic Society Annual Conference 2003 167, Royal Economic Society.
- Posada, Pedro & Straume, Odd Rune, 2002. "Merger, partial collusion and relocation," Working Papers in Economics 23/02, University of Bergen, Department of Economics.
- Andreea Cosnita-Langlais, 2008.
"Horizontal market concentration: Theoretical insights from the spatial models,"
EconomiX Working Papers
2008-42, University of Paris West - Nanterre la Défense, EconomiX.
- Cosnita-Langlais, Andreea, 2012. "Horizontal market concentration: Theoretical insights from spatial models," Research in Economics, Elsevier, vol. 66(1), pages 22-32.
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