HORIZONTAL MERGERS IN THE PRESENCE OF CAPACITY CONSTRAINTS.
We examine a merger between two competitors in a Bertrand‐Edgeworth model. We find that the effects of merger depend on the tightness of capacity constraints. The combination of two firms has no price effect if and only if the capacity constraints of all firms are binding both before and after the m...
| Publicado en: | Economic Inquiry Vol. 56; no. 2; pp. 1346 - 1357 |
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| Autores principales: | , |
| Formato: | Artículo |
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Wiley-Blackwell
Apr2018
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=128133117&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 128133117 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Apr2018 vid: 56 iid: 2 pid: 480 pub: Wiley-Blackwell artinfo: ui: 128133117 10.1111/ecin.12557 ppf: 1346 ppct: 11 formats: fmt: – @attributes: type: T – @attributes: type: P size: 190KB tig: atl: HORIZONTAL MERGERS IN THE PRESENCE OF CAPACITY CONSTRAINTS. aug: au: Chen, Zhiqi Li, Gang affil: Professor, School of Economics, Nanjing University, Nanjing, 210008, China Department of Economics, Carleton University, Ottawa, Ontario, K1S 5B6, Canada Assistant Professor, School of Economics, Nanjing University, Nanjing, 210008, China su: Computer simulation Microeconomics Economic competition Mergers & acquisitions Consumers' surplus sug: subj: Computer simulation Microeconomics Economic competition Mergers & acquisitions Consumers' surplus ab: We examine a merger between two competitors in a Bertrand‐Edgeworth model. We find that the effects of merger depend on the tightness of capacity constraints. The combination of two firms has no price effect if and only if the capacity constraints of all firms are binding both before and after the merger. However, a merger may turn a binding capacity constraint into a slack one, which results in higher prices. In an industry where excess capacity drives the premerger prices of all firms to the marginal cost, a merger may cause prices to rise even though aggregate capacity remains constant. (<italic>JEL</italic> L13, L40) pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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