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Profitability of Horizontal Mergers in the Presence of Price Stickiness

Hamideh Esfahani ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: In this paper, we investigate the profitability of horizontal mergers of firms with price adjustments. We take a di¤erential game approach and both the open-loop as well as the closed-loop equlibria are considered. We show that the merger incentive is determined by how fast the price adapts to the equilibrium level.

JEL-codes: C73 D43 L13 (search for similar items in EconPapers)
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Date: 2011-05
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