Profitability of Horizontal Mergers in the Presence of Price Stickiness
In this paper, we investigate the profitability of horizontal mergers of firms with price adjustments. We take a di¤erential game approach and both the open-loop as well as the closed-loop equlibria are considered. We show that the merger incentive is determined by how fast the price adapts to the equilibrium level.
|Date of creation:||May 2011|
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