A general analysis of sequential merger games with an application to cross-border mergers

Alberto Salvo

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper seeks to uncover why the pattern of equilibria in sequential merger games of a certain type is similar across a fairly wide class of models much studied in the literature. By developing general conditions characterising each element of the set of possible equilibria, I show that the solution to models that satisfy a certain sufficient condition will be restricted to the same subset of equilibria. This result is of empirical relevance in that the pattern of equilibria obtained for this wide class of models is associated with mergers not happening in isolation but rather bunching together. I extend the results to the analysis of cross-border mergers, studying two standard models that satisfy the sufficient condition --Sutton's (1991) vertically-differentiated oligopoly and Perry and Porter's (1985) fixed-supply-of-capital model.

Keywords: Mergers; sequential mergers; cross-border investment; technology transfer (search for similar items in EconPapers)
JEL-codes: D43 F23 G34 L13 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2004-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://eprints.lse.ac.uk/6732/ Open access version. (application/pdf)

Related works:
Working Paper: A General Analysis of Sequential Merger Games with an Application to Cross-Border Mergers (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:6732

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