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Spatial Price Discrimination and Merger: The N-Firm Case

  • John S. Heywood

    ()

    (Department of Economics, University of Wisconsin)

  • Kristen Monaco

    (Department of Economics, University of Wisconsin)

  • R. Rothschild

    (Department of Economics, Lancaster University)

The consequences of merger are analyzed in an N-firm model of spatial price discrimination. The merger occurs with known probability after location decisions have been made. The possibility of merger alters locations, generates inefficiency, and increases the profit of the merging firms. In the case of corner mergers, but never in the case of interior mergers, the possibility of merger may also reduce the profit of the excluded firms.

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Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 67 (2001)
Issue (Month): 3 (January)
Pages: 672-684

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Handle: RePEc:sej:ancoec:v:67:3:y:2001:p:672-684
Contact details of provider: Web page: http://www.southerneconomic.org/

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