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Horizontal Mergers in the Spokes Model

  • Emilie Dargaud
  • Carlo Reggiani

The theoretical analysis of merger poses a number of paradoxes. If firms compete in prices, a merger is profitable for all parties involved. Outsiders, however, free-ride and earn higher profits than insiders. The "spokes model" is a recently introduced framework to study n-firms spatial competition. This paper shows that in this model free-riding does not necessarily take place.

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Paper provided by Department of Economics, University of York in its series Discussion Papers with number 09/12.

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Handle: RePEc:yor:yorken:09/12
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  19. Brito, Duarte, 2003. "Preemptive mergers under spatial competition," International Journal of Industrial Organization, Elsevier, vol. 21(10), pages 1601-1622, December.
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  26. Gergely Csorba & Gabor Koltay & David Farkas, 2011. "Separating the ex post effects of mergers: an analysis of structural changes on the Hungarian retail gasoline market," IEHAS Discussion Papers 1118, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  27. R. Rothschild, 2000. "Merger under Spatial Competition," Urban Studies, Urban Studies Journal Limited, vol. 37(3), pages 443-449, March.
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  29. Juan Luis Jiménez & Jordi Perdiguero, 2012. "“Mergers and difference-in-difference estimator: why firms do not increase prices?”," IREA Working Papers 201205, University of Barcelona, Research Institute of Applied Economics, revised Feb 2012.
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  31. George Norman & Lynne Pepall, 1998. "Horizontal Mergers in Spatially Differentiated NonCooperative Markets: a Comment," Discussion Papers Series, Department of Economics, Tufts University 9804, Department of Economics, Tufts University.
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