This paper analyses the profitability of horizontal mergers in a Stackelberg model and their impact on welfare when there is uncertainty about the marginal costs of the newly merged firms. The authors consider that the merging firms decide their production strategy knowing the actual value of...

The paper investigates firms' behavior and outcomes (levels of cost-reducing R&D, output, profit and welfare in equilibrium) in a differentiated duopoly with process innovation. One of the important features in this paper is that spillovers operate in the R&D stage and are tied to the degree of...