Horizontal Mergers Without Synergies May Increase Consumer Welfare

Johan Stennek ()
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Johan Stennek: The Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

No 558, Working Paper Series from Research Institute of Industrial Economics

Abstract: Markets with imperfect competition do not induce a cost-minimizing allocation of production between firms. The market's ability to rationalize production is even more limited if costs are private information to firms. Merger in such markets generate an efficiency gain associated with the pooling of information. Not only may costs be reduced, the price level and price variability may also decline and consumers may thus gain.

Keywords: Horizontal Merger; Welfare; Asymmetric Information (search for similar items in EconPapers)
JEL-codes: D43 D82 G34 L10 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2001-06-04
New Economics Papers: this item is included in nep-cfn and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0558

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