We analyze the profitability of horizontal mergers in Cournot markets, where firms are divided into two groups based on the extent to which their products are differentiated. We show that both within-group and cross-group mergers are more likely to occur when either products are more distant...

A joint venture with market power benefits from restricting its output which, in turn, requires the partners to restrict the supply of their inputs. However, since each partner benefits only partially from restricting its input, both over-supply their inputs from the viewpoint of the optimal use...