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Cooperative merger and joint maximization under sequential entry

Heywood, J S and Monaco, K and Rothschild, R (2003) Cooperative merger and joint maximization under sequential entry. Working Paper. The Department of Economics, Lancaster University.

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    Abstract

    This paper explores the concept of cooperative merger between two of three entrants that arrive sequentially in a spatial market and practise discriminatory pricing. In this framework, in contrast to much of the theoretical literature, the so-called 'merger paradox' can be comprehensively overturned. We compare our results with those arising when one firm stategically locates two plants. Although this second problem is superficially similar to the first, the underlying behaviour and implications differ in crucial respects. The welfare consequences of all our results are demonstrated.

    Item Type: Monograph (Working Paper)
    Uncontrolled Keywords: Spatial price discrimination ; sequential entry ; cooperative merger ; merger paradox ; multi-plant location
    Subjects:
    Departments: Lancaster University Management School > Economics
    ID Code: 48628
    Deposited By: ep_importer_pure
    Deposited On: 11 Jul 2011 22:03
    Refereed?: No
    Published?: Published
    Last Modified: 27 Jul 2012 01:11
    Identification Number:
    URI: http://eprints.lancs.ac.uk/id/eprint/48628

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