Horizontal Mergers in the Spokes Model

Emilie Dargaud and Carlo Reggiani

Discussion Papers from Department of Economics, University of York

Abstract: The theoretical analysis of merger poses a number of paradoxes. If firms compete in prices, a merger is profitable for all parties involved. Outsiders, however, free-ride and earn higher profits than insiders. The "spokes model" is a recently introduced framework to study n-firms spatial competition. This paper shows that in this model free-riding does not necessarily take place.

Keywords: horizontal mergers; spokes model; mergers paradoxes. (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 (search for similar items in EconPapers)
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Related works:
Working Paper: On the Price Effects of Horizontal Mergers: A Theoretical Interpretation (2012)
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