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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...

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Published in:Economic Inquiry Vol. 56; no. 2; pp. 1346 - 1357
Main Authors: Chen, Zhiqi, Li, Gang
Format: Article
Published: Wiley-Blackwell Apr2018
Subjects:
Computer simulation
Microeconomics
Economic competition
Mergers & acquisitions
Consumers' surplus
Online Access:View this record in EBSCOhost

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