Horizontal Mergers with Capital Adjustment: Workers' Cooperatives and the Merger Paradox

Flavio Delbono and Luca Lambertini ()

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We study the incentives towards horizontal merger among firms when the amount of capital is the strategic variable. We focus on is workers' cooperatives, but our conclusions apply also to employment-constrained profit maximisers. Within a simple oligopoly model, we prove that the horizontal merger, for any merger size, is: (i) privately efficient for insiders as well as for outsiders; (ii) socially efficient if market size is large enough, even in the case of merger to monopoly.

JEL-codes: D43 L13 L21 L41 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-bec, nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: HORIZONTAL MERGERS WITH CAPITAL ADJUSTMENT: WORKERS COOPERATIVES AND THE MERGER PARADOX (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:wp962

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