National vs. international welfare effects of horizontal mergers
Empirical evidence suggests that many mergers do not increase profits of the participating firms and decrease welfare. Due to the globalization of markets we should take an international view on mergers and their welfare effects. This paper develops a Bertrand-model of an international heterogeneous market. It shows that there are neither positive incentives to merge nor positive international welfare effects from a merger if there are no positive synergy effects. Furthermore, it shows that national welfare effects are bigger than international ones when there are many domestic firms relative to domestic demand.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: 01062 Dresden|
Phone: ++49 351 463 2196
Fax: ++49 351 463 7739
Web page: http://www.tu-dresden.de/wiwi/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Braid, Ralph M., 1999. "The price and profit effects of horizontal mergers in two-dimensional spatial competition," Economics Letters, Elsevier, vol. 62(1), pages 113-119, January.
- Farrell, Joseph & Shapiro, Carl, 1988.
"Horizontal Mergers: An Equilibrium Analysis,"
Department of Economics, Working Paper Series
qt0tp305nx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Jacquemin, Alexis, 1990. "Horizontal concentration and European merger policy," European Economic Review, Elsevier, vol. 34(2-3), pages 539-550, May.
- Hay, G.A. & Werden, G.J., 1993.
"Horizontal Mergers: Law, Policy, and Economies,"
93-1, U.S. Department of Justice - Antitrust Division.
- Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 98(2), pages 185-199.
- Perry, Martin K & Porter, Robert H, 1985. "Oligopoly and the Incentive for Horizontal Merger," American Economic Review, American Economic Association, vol. 75(1), pages 219-27, March.
- Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
When requesting a correction, please mention this item's handle: RePEc:zbw:tuddps:1001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.