The effect of horizontal mergers, when firms compete in prices and investments
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- dc.contributor.author Motta, Massimoca
- dc.contributor.author Tarantino, Emanueleca
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2018-02-14T15:29:52Z
- dc.date.available 2018-02-14T15:29:52Z
- dc.date.issued 2017-08-30
- dc.date.modified 2018-02-14T15:29:26Z
- dc.description.abstract It has been suggested that mergers, by increasing concentration, raise incentives to invest and hence are pro-competitive. To study the effects of mergers, we rewrite a game with simultaneous price and cost-reducing investment choices as one where firms only choose prices, and make use of aggregative game theory. We find no support for that claim: absent efficiency gains, the merger lowers total investments and consumer surplus. Only if it entails sufficient efficiency gains, will it be pro-competitive. We also show there exist classes of models for which the results obtained with cost-reducing investments are equivalent to those with quality-enhancing investments.
- dc.format.mimetype application/pdfca
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1579
- dc.identifier.citation
- dc.identifier.uri http://hdl.handle.net/10230/33874
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1579
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword horizontal mergers
- dc.subject.keyword innovation
- dc.subject.keyword investments
- dc.subject.keyword network-sharing agreements
- dc.subject.keyword competition.
- dc.subject.keyword Business Economics and Industrial Organization
- dc.title The effect of horizontal mergers, when firms compete in prices and investmentsca
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper