Horizontal Mergers with Scale Economies

Dragone, Davide ; Lambertini, Luca ; Mantovani, Andrea (2006) Horizontal Mergers with Scale Economies. Bologna: Dipartimento di Scienze economiche DSE, p. 6. DOI 10.6092/unibo/amsacta/4716. In: Quaderni - Working Paper DSE (571). ISSN 2282-6483.
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Abstract

We examine the profitability and social efficiency of horizontal mergers in a Cournot oligopoly with decreasing average costs. Assuming the merger allows for a reduction in the total amount of fixed costs, we identify the conditions under which the merger is, respectively, profitable and socially desirable. There exists an admissible parameter range wherein the merger is socially convenient but not profitable. In such a case, the policy maker may induce firms to merge through subsidies financed via a lump sum tax.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Dragone, Davide
Lambertini, Luca
Mantovani, Andrea
Keywords
horizontal merger, oligopoly, efficiency
Subjects
ISSN
2282-6483
DOI
Deposit date
29 Feb 2016 11:35
Last modified
29 Feb 2016 11:35
URI

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