Merger results under price competition and plant-specific unions

Luciano Fanti and Nicola Meccheri (nicola.meccheri@unipi.it)

Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy

Abstract: This paper analyses the effects of a downstream merger in a differentiated duopoly under price competition and plant-specific unions. We show, in contrast with the preceding literature, that the standard welfare results may be reversed: a downstream merger may increase consumer surplus and overall welfare. In particular, this applies when unions are sufficiently wage-oriented and the market size is included in a certain intermediate range.

Keywords: mergers; social welfare; price competition; plant-specific unions. (search for similar items in EconPapers)
JEL-codes: D43 J50 L13 (search for similar items in EconPapers)
Date: 2012-03-01
New Economics Papers: this item is included in nep-bec and nep-ind
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2012/135

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