Pre-emptive mergers and downstream cost asymmetry

J. Alejandro Gelves and John Heywood

Economics Letters, 2016, vol. 147, issue C, 23-26

Abstract: With sufficient downstream cost asymmetry a horizontal merger will be chosen over a vertical merger. This results because the technology transfer is large and the incentive to vertically merge shrinks as the horizontal merger eliminates a cost asymmetry induced “bottleneck.”

Keywords: Horizontal merger; Vertical integration; Free-riding (search for similar items in EconPapers)
JEL-codes: L20 L21 L23 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:147:y:2016:i:c:p:23-26

DOI: 10.1016/j.econlet.2016.08.006

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