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Mergers and Investments in New Products

Author

Listed:
  • Anna D’annunzio

    (UNINT - Università degli Studi Internazionali di Roma = University of International Studies of Rome)

  • Bruno Jullien

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Yassine Lefouili

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Leonardo Madio

    (Unipd - Università degli Studi di Padova = University of Padua)

Abstract

>This paper examines how horizontal mergers affect firms' incentives to invest in R&D leading to the development of new products. We characterize the impact of a merger to monopoly and a 3-to-2 merger on equilibrium innovation efforts and consumer surplus, absent efficiency gains and spillovers. We show that a 3-to-2 merger directly alters the outsider's innovation incentives by shifting its best-response function upward, and we analyze how this mechanism affects merger outcomes for innovation and consumer surplus. Finally, we examine how efficiency gains and remedies modify post-merger innovation efforts.

Suggested Citation

  • Anna D’annunzio & Bruno Jullien & Yassine Lefouili & Leonardo Madio, 2026. "Mergers and Investments in New Products," Working Papers hal-05502168, HAL.
    • Handle: RePEc:hal:wpaper:hal-05502168
    Note: View the original document on HAL open archive server: https://hal.science/hal-05502168v1
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