Faulí-Oller, Ramón; Escrihuela, Marc - Instituto Valenciano de Investigaciones Económicas (IVIE) - 2007
It is well known that the profitability of horizontal mergers with quantity competition is scarce. However, in an asymmetric Stackelberg market we obtain that some mergers are profitable. Our main result is that mergers among followers become profitable when the followers are inefficient enough....