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We consider a two-stage principal-agent model with limited liability in which a CEO is employed as agent to gather information about suitable merger targets and to manage the merged corporation in case of an acquisition. Our results show that the CEO systematically recommends targets with low...
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contribute, on average, 20% of the total merger value added. Moreover, we find that multimarket efficiency gains dominate …
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different markets. We focus on the interaction between the merger's effects on downstream efficiency and on buyer power in a … the downstream efficiency of the merging parties. When the upstream cost function is convex, we find that there are … "waterbed effects", that is, each small retailer pays a higher average tariff if a buyer merger improves downstream efficiency …
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