Profitable horizontal mergers: A market structure-oriented view

Steffen Huck, Kai Konrad and Wieland Müller

No 2000,27, SFB 373 Discussion Papers from Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes

Abstract: We propose a model in which mergers exert a more pronounced effect on the structure of a market than simply reducing the number of competitors. We show that this may render horizontal mergers profitable and welfare-improving even if costs are linear. The results help to reconcile theory with various empirical findings on mergers.

Keywords: efficient hedging; quantile hedging; jump-diffusion; martingale measure. (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:sfb373:200027

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