Merger Externalities in Oligopolistic Markets

Klaus Gugler () and Florian Szücs

No 1321, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We quantify externalities on profitability and market shares of competing firms in oligopolistic markets through the transition from an n to an n - 1 player oligopoly after a merger. Competitors are identified via the European Commission's market investigations and our methodology allows us to distinguish the externality due to the change in market structure from the merger effect. We obtain results consistent with the predictions of standard oligopoly models: rivals expand their output and increase their profits, whereas merging firms are negatively affected. This indicates that on average the market power effects of large mergers outweigh the efficiencies.

JEL-codes: G34 L13 L40 (search for similar items in EconPapers)
Pages: 32 p.
Date: 2013
New Economics Papers: this item is included in nep-com, nep-ind and nep-law
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Journal Article: Merger externalities in oligopolistic markets (2016)
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