Cooperative merger and joint maximization under sequential entry

John Heywood, Kristen Monaco () and Robert Rothschild

No 541061, Working Papers from Lancaster University Management School, Economics Department

Abstract: This paper explores the concept of cooperative merger between two of three entrants that arrive sequentially in a spatial market and practise discriminatory pricing. In this framework, in contrast to much of the theoretical literature, the so-called 'merger paradox' can be comprehensively overturned. We compare our results with those arising when one firm stategically locates two plants. Although this second problem is superficially similar to the first, the underlying behaviour and implications differ in crucial respects. The welfare consequences of all our results are demonstrated.

Keywords: Spatial price discrimination; sequential entry; cooperative merger; merger paradox; multi-plant location (search for similar items in EconPapers)
Date: 2003
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.lancaster.ac.uk/media/lancaster-univers ... ooperativeMerger.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:lan:wpaper:541061

Access Statistics for this paper

More papers in Working Papers from Lancaster University Management School, Economics Department Contact information at EDIRC.
Bibliographic data for series maintained by Giorgio Motta ().