merger incentives to influence entry decisions. Mergers can facilitate and deter entry. While horizontal mergers to deter … more bargaining power to the merged entity than a horizontal merger to monopoly. The model is applied to analyze strategic … potential entrant out of the market. I provide conditions for such entry-deterring vertical mergers to occur. -- Bargaining …

contrast to horizontal merger, there is a probability that an RJV contract will fail to enforce R&D sharing. We find, first …, that a horizontal agreement always arises. The insiders’ merger/RJV choice involves a trade-off. While merger offers … greater R&D complementarity favours merger. Interestingly, the insiders may choose to merge even when RJV contracts are always …