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Merger and collusion in contests
[Kollusion und Fusion in Contests]

Author

Listed:
  • Huck, Steffen
  • Konrad, Kai A.
  • Müller, Wieland

Abstract

Competition in some product markets takes the form of a contest. If some firms cooperate in such markets, they must decide how to allocate effort on each of their products and whether to reduce the number of their products in the competition. We show how this decision depends on the convexity properties of the contest success function, and we characterize conditions under which cooperation is profitable.

Suggested Citation

  • Huck, Steffen & Konrad, Kai A. & Müller, Wieland, 2001. "Merger and collusion in contests
    [Kollusion und Fusion in Contests]
    ," Discussion Papers, Research Unit: Market Processes and Governance FS IV 01-04, Social Science Research Center Berlin (WZB).
  • Handle: RePEc:zbw:wzbmpg:fsiv0104
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    File URL: https://www.econstor.eu/bitstream/10419/51127/1/329330403.pdf
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    References listed on IDEAS

    as
    1. Huck, Steffen & Konrad, Kai A. & Muller, Wieland, 2001. "Divisionalization in contests," Economics Letters, Elsevier, vol. 70(1), pages 89-93, January.
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Derek Clark & Øystein Foros & Jan Sand, 2011. "Foreclosure in contests," Public Choice, Springer, vol. 148(1), pages 215-232, July.
    2. Krakel, Matthias & Sliwka, Dirk, 2006. "Strategic delegation and mergers in oligopolistic contests," Journal of Economics and Business, Elsevier, vol. 58(2), pages 119-136.
    3. Priks, Mikael, 2011. "Firm competition and incentive pay: Rent seeking at work," Economics Letters, Elsevier, vol. 113(2), pages 154-156.
    4. Konrad, Kai A., 2007. "Strategy in contests: an introduction
      [Strategie in Turnieren – eine Einführung]
      ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, Social Science Research Center Berlin (WZB).
    5. Martin Grossmann & Helmut Dietl, 2012. "Asymmetric contests with liquidity constraints," Public Choice, Springer, vol. 150(3), pages 691-713, March.
    6. Boudreau, James W. & Sanders, Shane & Shunda, Nicholas, 2017. "The Role of Noise in Alliance Formation and Collusion in Conflicts," MPRA Paper 81533, University Library of Munich, Germany.
    7. Wang Zhewei, 2010. "The Optimal Accuracy Level in Asymmetric Contests," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-18, April.
    8. Boudreau, James W. & Shunda, Nicholas, 2015. "Tacit Collusion in Repeated Contests with Noise," MPRA Paper 65671, University Library of Munich, Germany.

    More about this item

    Keywords

    Contests; merger; collusion; promotional competition; Kampf um Marktanteile; Kollusion; Fusion;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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