Working Paper No. 513

Endogenous Mergers in Concentrated Markets

Published: July 15, 1998Pages: 43Keywords: Endogenous mergers, Coalition formationJEL-codes: L13, L41

Endogenous Mergers in Concentrated Markets Henrik Horn and Lars Persson


This paper proposes an approach for prediction the pattern of mergers when different mergers are feasible. It generalizes the traditional IO approach, employing ideas on coalition-formation from cooperative gave theory. The model suggests that in concentrated markets, mergers are conductive to market structures with large industry profits, and thus points to a conflict between private and social incentives. It is shown how mergers may be undertaken in order to preempt other possible, and socially more desirable, mergers. The model also throws light on the formation of research joint ventures and tariff-jumping foreign direct investment.

Henrik Horn

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Ph: +46 8 665 4540
henrik.horn@ifn.se

Lars Persson

Contact

Ph: +46 8 665 4504
lars.persson@ifn.se

Elgar Companion to

Social Capital and Health

Martin Ljunge okt 2018.jpg

Martin Ljunge, IFN, is the author of a chapter, "Trust promotes health: addressing reverse causality by studying children of immigrants", in a new book edited by Sherman Folland and Eric Nauenberg. The cutting edge of research is presented, covering the ever-expanding social capital field.

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