Note on Stable Mergers in a Market with Asymmetric Substitutability

Takayuki Watanabe () and Nobuo Matsubayashi ()
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Takayuki Watanabe: Keio University
Nobuo Matsubayashi: Keio University

Economics Bulletin, 2013, vol. 33, issue 3, 2024-2033

Abstract: This paper studies the stability of mergers between firms in a Cournot market. Unlike most existing works, we consider a demand structure where the substitutability between firms is asymmetric. We specifically focus on the stability of the grand coalition by analyzing the core allocation. The main result of our analysis shows that the grand coalition becomes stable, as the market is more asymmetric in terms of substitutability.

Keywords: Core; Horizontal merger; Cournot oligopoly; Differentiation; Grand coalition (search for similar items in EconPapers)
JEL-codes: C7 L1 (search for similar items in EconPapers)
Date: 2013-08-09
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Citations: View citations in EconPapers (9)

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