Working Paper No. 558

Horizontal Mergers Without Synergies May Increase Consumer Welfare

Published: June 4, 2001 Pages: 13Keywords: Horizontal Merger; Welfare; Asymmetric InformationJEL-codes: D43; D82; G34; L10

Horizontal Mergers Without Synergies May Increase Consumer Welfare Johan Stennek


Markets with imperfect competition do not induce a cost-minimizing allocation of production between firms. The market's ability to rationalize production is even more limited if costs are private information to firms. Merger in such markets generate an efficiency gain associated with the pooling of information. Not only may costs be reduced, the price level and price variability may also decline and consumers may thus gain.

 

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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