Leading merger in a Stackelberg oligopoly: Profitability and consumer welfare

This paper examines the effects of obtaining a strategic advantage of becoming the leader in the market on insiders’ incentives to merge and consumer welfare. We show that being the market leader is privately profitable for the merging insiders. We also show that the leading merger would benefit consumers if and only if the number of insiders is sufficiently small.

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Year of publication:	2015
Authors:	Liu, Chih-Chen ; Wang, Leonard F.S.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 129.2015, C, p. 1-3
Publisher:	Elsevier
Subject:	Horizontal merger \| Stackelberg competition \| Consumer welfare

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Type of publication:	Article
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L13 - Oligopoly and Other Imperfect Markets ; L40 - Antitrust Policy. General ; L41 - Monopolization; Horizontal Anticompetitive Practices
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011263415