The Profitability of Small Horizontal Mergers with Nonlinear Demand Functions

Esfahani, Hamideh ; Lambertini, Luca (2011) The Profitability of Small Horizontal Mergers with Nonlinear Demand Functions. Bologna: Dipartimento di Scienze economiche DSE, p. 15. DOI 10.6092/unibo/amsacta/4513. In: Quaderni - Working Paper DSE (728). ISSN 2282-6483.
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Abstract

We want to take a differential game approach with price dynamics to conduct an investigation into the consequences of horizontal merger of firms where the demand function is nonlinear. We take into consideration the open-loop equilibrium. We show that in relation to the fact that the demand is nonlinear and prices follow some stickiness an incentive for small merger exists, while it does not appear under the standard approach using a linear demand function.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Esfahani, Hamideh
Lambertini, Luca
Keywords
Horizontal mergers, Differential game, Sticky price, Nonlinear demand
Subjects
ISSN
2282-6483
DOI
Deposit date
02 Feb 2016 11:35
Last modified
02 Feb 2016 11:35
URI

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