Stable mergers and cartels involving asymmetric firms

Margarida Catalão-Lopes

Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics

Abstract: The endogenous formation of coalitions involving asymmetric firms and their stability are analyzed as a function of differences in efficiency and of the mixed cost of production. Results are derived for cartels as well as for mergers. Players have constant but different marginal costs of production and no rule of profit sharing is fixed. The analysis is illustrated for a specific path of collusion. Finally welfare effects are studied and some conclusions are drawn for antitrust policy.

Pages: 62 pages
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:unl:unlfep:wp371

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