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We study optimal merger policy in a dynamic model in which the presence of scale economies implies that firms can … computationally, allows firms to invest or propose mergers according to the relative profitability of these strategies. An antitrust … authority is able to block mergers at some cost. We examine the optimal policy when the antitrust authority can commit to a …
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We study welfare effects of horizontal mergers under a successive oligopoly model and find that downstream mergers can increase welfare if they reduce input prices. The lower input price shifts some input production from cost- inefficient upstream firms to cost-efficient ones. Also, the lower...
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