Mergers in Multidimensional Competition

Carl Davidson () and Ben Ferrett

Economica, 2007, vol. 74, issue 296, 695-712

Abstract: Horizontal mergers are often driven by the desire to exploit R&D complementarities. We investigate the positive features of such a merger when oligopolists compete both in process R&D and on the product market. For a non‐trivial degree of R&D complementarity, we show that the merger has the following intuitively appealing features independently of the strategic variable in market competition: insiders benefit; outsiders are harmed; and insiders end up larger than outsiders. These results contrast with those of traditional models of merger to achieve market power alone, which are known to be counterintuitive and sensitive to the mode of product market competition.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
https://doi.org/10.1111/j.1468-0335.2007.00595.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:econom:v:74:y:2007:i:296:p:695-712

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0013-0427

Access Statistics for this article

Economica is currently edited by Frank Cowell, Tore Ellingsen and Alan Manning

More articles in Economica from London School of Economics and Political Science Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().