In hunt for size: Merger formation in the oil industry

Leslie Neubecker and Manfred Stadler

No 258, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: This paper analyzes the recent mergers in the oil industry. Oil is assumed to be a homogeneous good which is produced by a small number of firms with different unit costs. Merger formation is endogenously explained as a result of cooperative decisions. We show that the mergers are amongst very asymmetric firms if initial size differences are moderate. If size differences are large, however, the more efficient firms participate in the mergers, while the least efficient firms are not attractive partners and, therefore, remain independent in the post-merger market.

Keywords: Asymmetric horizontal mergers; Coalition formation; Oil industry (search for similar items in EconPapers)
JEL-codes: C71 G34 L71 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:258

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