On merger profitability and the intensity of rivalry

Marc Escrihuela-Villar

No 2015-54, Economics Discussion Papers from Kiel Institute for the World Economy

Abstract: This paper considers a general symmetric quantity-setting oligopoly where the "coefficient of cooperation" defined by Cyert and DeGroot (An Analysis of Cooperation and Learning in a Duopoly Context, 1973) is interpreted as the parameter indicating severity of competition. It is obtained that horizontal mergers are more likely to be profitable in a more competitive market structure. Consequently, the results by Salant, Switzer and Reynolds (The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium, 1983) about merger profitability are sensitive to the assumption of pre-merger Cournot competition.

Keywords: oligopoly; competitive intensity; horizontal mergers (search for similar items in EconPapers)
JEL-codes: L13 L40 L41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (3)

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https://www.econstor.eu/bitstream/10419/112744/1/831988789.pdf (application/pdf)

Related works:
Journal Article: On Merger Profitability and the Intensity of Rivalry (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201554

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