Spillover effects in oligopolistic markets

Klaus Gugler () and Florian Szücs

VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association

Abstract: We estimate the spillovers on firm profitability and market shares in oligopolistic markets through the transition from an n to an n-1 player oligopoly after a merger in the industry. Competitors are identified via the European Commission s market investigations and our methodology allows us to disentangle the spillover due to the change in market structure from the merger effect. We obtain results consistent with the predictions of standard oligopoly models: non-merging rivals expand their output and increase their profits, while merging firms barely break even. The size of the effect is larger in industries with fewer oligopolists and higher initial profits.

JEL-codes: G34 L13 L40 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-bec and nep-com
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