Profitable Horizontal Mergers without Cost Advantages: The Role of Internal Organization, Information, and Market Structure

Steffen Huck, Kai Konrad and Wieland Müller

No 435, CESifo Working Paper Series from CESifo

Abstract: Merged firms are typically rather complex organizations. Accordingly, merger has a more profound effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare-improving even if costs are linear. The driving force behind these results, which help to reconcile theory with various empirical findings, is the assumption that information about output decisions flows more freely within a merged firm.

Keywords: Merger; internal organizational structure; information; timing; market structure (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Profitable horizontal mergers without cost advantage: The role of intenal organization, information and market structure (2004)
Working Paper: Profitable horizontal mergers without cost advantages: The role of internal organization, information, and market structure (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_435

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