The profitability of small horizontal mergers with nonlinear demand functions

Hamideh Esfahani, Luca Lambertini

We want to take a differential game approach with price dynamics to conduct an investigation into the consequences of horizontal merger of firms where the demand function is nonlinear. We take into consideration the open-loop equilibrium. We show that in relation to the fact that the demand is nonlinear and prices follow some stickiness an incentive for small merger exists, while it does not appear under the standard approach using a linear demand function.

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Year of publication:	[2011] ; This draft: January 2011
Authors:	Esfahani, Hamideh ; Lambertini, Luca
Publisher:	Bologna, Italy : Alma Mater Studiorum - Università di Bologna, Department of Economics
Subject:	Horizontal mergers \| Differential game \| Sticky price \| Non-linear demand \| Theorie \| Theory \| Fusion \| Merger \| Horizontale Integration \| Horizontal integration \| Oligopol \| Oligopoly \| Rentabilität \| Profitability \| Preisrigidität \| Price stickiness

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Extent:	1 Online-Ressource (circa 15 Seiten) Illustrationen
Series:	Quaderni - working paper DSE / Alma Mater Studiorum - Università di Bologna, Department of Economics. - Bologna : [Verlag nicht ermittelbar], ISSN 2282-6483, ZDB-ID 2125055-8. - Vol. no 728
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Graue Literatur ; Non-commercial literature ; Arbeitspapier ; Working Paper
Language:	English
Other identifiers:	10.6092/unibo/amsacta/4513 [DOI] hdl:10419/159569 [Handle]
Classification:	C73 - Stochastic and Dynamic Games ; D43 - Oligopoly and Other Forms of Market Imperfection ; G34 - Mergers; Acquisitions; Restructuring; Corporate Governance ; L13 - Oligopoly and Other Imperfect Markets
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10011734933