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Incentives to merge in asymmetric mixed oligopoly

Author

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  • Sylvain Kadohognon Ouattara

    () (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, Institut Supérieur de Commerce et d'Administration des Entreprises, Casablanca, Morocco)

Abstract

This paper analyzes mergers incentives in an asymmetric mixed oligopoly consisting of two identical private firms and one public firm. It is shown that when there is a technological gap between the public and private firms, both of them will want to merge when the public firm is inefficient and the percentage of the shares owned by private owners after the merger is relatively high. When all firms have identical technology, public and private firms will want to merge when the percentage of the shares owned by private owner in the merged entity is relatively low (Artz et al. 2009). Yet, we show that when the technological gap is high enough, the merger between the public firm and one private firm often includes complete privatization.

Suggested Citation

  • Sylvain Kadohognon Ouattara, 2015. "Incentives to merge in asymmetric mixed oligopoly," Post-Print halshs-01184003, HAL.
    • Handle: RePEc:hal:journl:halshs-01184003
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01184003
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    References listed on IDEAS

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    1. Artz, Benjamin & Heywood, John S. & McGinty, Matthew, 2009. "The merger paradox in a mixed oligopoly," Research in Economics, Elsevier, vol. 63(1), pages 1-10, March.
    2. Yasuhiko Nakamura & Tomohiro Inoue, 2007. "Mixed Oligopoly and Productivity-Improving Mergers," Economics Bulletin, AccessEcon, vol. 12(20), pages 1-9.
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    8. repec:ebl:ecbull:v:12:y:2005:i:6:p:1-6 is not listed on IDEAS
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    12. Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-227, March.
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    Cited by:

    1. Bárcena-Ruiz, Juan Carlos & Garzón, María Begoña, 2020. "Mergers between local public firms," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).

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    More about this item

    Keywords

    mergers incentives; privatization; oligopoly;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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