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Mergers and Investments in New Products

Author

Listed:
  • Anna D’Annunzio

    (University of Rome-Tor Vergata)

  • Bruno Jullien

    (Toulouse School of Economics)

  • Yassine Lefouili

    (Toulouse School of Economics)

  • Leonardo Madio

    (University of Padova)

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 con- sumer 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 func- tion upward, and we analyze how this mechanism affects merger outcomes for inno- vation 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, "undated". "Mergers and Investments in New Products," "Marco Fanno" Working Papers 0332, Dipartimento di Scienze Economiche "Marco Fanno".
    • Handle: RePEc:pad:wpaper:0332
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    File URL: https://economia.unipd.it/sites/economia.unipd.it/files/20250332.pdf
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    Cited by:

    1. is not listed on IDEAS
    2. Lefouili, Yassine & Madio, Leonardo, 2023. "Market Structure and Investments : A Progress Report," TSE Working Papers 23-1491, Toulouse School of Economics (TSE), revised Sep 2024.
    3. Lefouili, Yassine & Madio, Leonardo, 2026. "Mergers and investments: Where do we stand?," International Journal of Industrial Organization, Elsevier, vol. 105(C).

    More about this item

    Keywords

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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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