- DELEGATION AND MERGERS IN OLIGOPOLY

Javier M. López Cuñat and Miguel González-Maestre ()
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Javier M. López Cuñat: Universidad de Alicante
Authors registered in the RePEc Author Service: Javier Mateo López-Cuñat ()

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: In this paper we analyze the effect strategic delegation on the profitability of mergers in the context of a Cournot oligopoly with linear demand and cost functions. It is assumed that, after the merging process is completed, the owner of every independent firm decides its managerial incentive for his manager. We show that the required fraction of merging firms for a merger to be profitable, in our model with delegation, is substantially smaller that without delegation.

Keywords: Strategic Delegation; Mergers; Cournot Oligopoly (search for similar items in EconPapers)
Date: 1999-03
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Related works:
Journal Article: Delegation and mergers in oligopoly (2001)
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Persistent link: http://EconPapers.repec.org/RePEc:ivi:wpasad:1999-03

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