Mergers among leaders and mergers among followers

John Heywood and Matthew McGinty

Economics Bulletin, 2007, vol. 12, issue 12, 1-7

Abstract: We are the first to confirm that sufficient cost convexity in a Stackelberg model generates profitable mergers between two leaders and between two followers. Moreover, the degree of convexity required for leaders to merge is generally far smaller than that required for followers. Most importantly, the structure of the stage game means that the convexity required for either two followers or two leaders to merge is less than that required for two Cournot competitors.

JEL-codes: L1 (search for similar items in EconPapers)
Date: 2007-06-04
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Citations: View citations in EconPapers (13)

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