We study the incentives towards horizontal merger among firms when the amount of capital is the strategic variable. The … maximisers. Within a simple oligopoly model, we prove that the horizontal merger, for any merger size, is: (i) privately … merger to monopoly. …

We study the incentives towards horizontal merger among firms when the amount of capital is the strategic variable. We … simple oligopoly model, we prove that the horizontal merger, for any merger size, is: (i) privately efficient for insiders as … well as for outsiders; (ii) socially efficient if market size is large enough, even in the case of merger to monopoly …

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 …