We provide a possible explanation for the empirical puzzle that mergers often reduce profits, but raise share prices. If being an "in- sider" is better than being an "outsider", firms may merge to preempt their partner merging with a rival. The insiders' stock market value is increased, since...

Sports organizations, Hollywood studios and TV channels grant satellite and cable networks exclusive rights to televise their matches, movies and media contents. Exclusive distribution prevents viewers from watching attractive programs and reduces the TV-distributors incentives to compete in prices.