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Merger and Product Range Rivalery

Author

Listed:
  • Lommerud, K.E.
  • Sorgard, L.

Abstract

The received literature concludes that if scale economies are absent, mergers are often unprofitable under Cornot competition, but always profitable under Bertrand. In a linear demand model with three firms initially, where there are two merger candidates, we show that results will change if we introduce the number of brands as a choice variable.

Suggested Citation

  • Lommerud, K.E. & Sorgard, L., 1997. "Merger and Product Range Rivalery," Norway; Department of Economics, University of Bergen 165, Department of Economics, University of Bergen.
    • Handle: RePEc:fth:bereco:165
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    References listed on IDEAS

    as
    1. Michael Spence, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(2), pages 217-235.
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    More about this item

    Keywords

    MERGERS ; PRODUCTS;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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