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Author :
Publisher : DIANE Publishing
ISBN 13 : 1428958495
Total Pages : 30 pages
Book Rating : 4.4/5 (289 download)
Download or read book The competitive effects of mergers between asymmetric firms written by and published by DIANE Publishing. This book was released on with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Federal Trade Federal Trade Commission
Publisher : CreateSpace
ISBN 13 : 9781514157206
Total Pages : 28 pages
Book Rating : 4.1/5 (572 download)
Download or read book The Competitive Effects of Mergers Between Asymmetric Firms written by Federal Trade Federal Trade Commission and published by CreateSpace. This book was released on 2015-06-01 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: The 1992 Horizontal Merger Guidelines suggest that the merger of two relatively weak competitors may result in a strong competitor and may lead to lower prices, despite the resulting increase in concentration. This paper introduces incomplete information into a simple model of repeated competition among firms that are asymmetric in their likely degree of efficiency at each stage of competition. In such a setting there do exist profitable yet price-reducing mergers among weaker firms. This model reasonably describes mergers between asymmetric firms that participate in auction or procurement settings and strengthens insights from the literature on asymmetric auctions regarding postmerger incentives for aggressive pricing. Finally, this model illustrates that the efficiencies described in the typical modeling of mergers in the asymmetric auction literature have private but not social benefits, and thus should not be permitted as a justification for merger.
Author : Charles Jonathan Thomas
Publisher :
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4.:/5 (72 download)
Download or read book The Competitive Effects of Mergers Between Asymmetric Firms written by Charles Jonathan Thomas and published by . This book was released on 1998 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Ramon Fauli-Oller
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Mergers Between Asymmetric Firms written by Ramon Fauli-Oller and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using only information on the degree of concavity of demand and observable structural variables such as the market shares of firms, a necessary and sufficient condition for a merger to increase welfare is derived. On the profitability side, we obtain that when market size decreases merger profitability increases.
Author : Charles J. Thomas
Publisher :
ISBN 13 :
Total Pages : 27 pages
Book Rating : 4.:/5 (399 download)
Download or read book The Competitive Effects of Mergers Between Asymmetric Firms written by Charles J. Thomas and published by . This book was released on 1998 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Ramón Faulí-Oller
Publisher :
ISBN 13 : 9788448218157
Total Pages : 24 pages
Book Rating : 4.2/5 (181 download)
Download or read book Mergers Between Asymmetric Firms written by Ramón Faulí-Oller and published by . This book was released on 1998 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Xia Li
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (794 download)
Download or read book Merger Incentives of Cost Asymmetric Firms Under Production Differentiation written by Xia Li and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This report examines merger incentives of cost asymmetric firms under product differentiation and their welfare implications. Considering a simple contract under which merger profit is distributed according to the proportions of differential marginal costs between duopolistic firms, we show in a stylized model that for almost all parameter ranges (in terms of market competition intensity and marginal cost differential), a low-cost firm may have no incentive to merge with a high-cost firm whereas the high-cost firm always finds merger to be profitable. Only when marginal cost differential is sufficiently low and the degree of product similarity is sufficiently high will both the low-cost firm and the high-cost firm share the common interest in merger. On the other hand, the merger equilibrium is not welfare-improving, regardless of whether the firms initially compete in quantities or prices. Viewed from the perspective of production efficiency, mergers with differentiated products thus create a fundamental conflict between the maximization of consumer and social welfare and the maximization of firm profits. We also examine the scenario that merger takes place when merger profit exceeds the sum of firm profits under duopoly, without considering how merger profit is distributed between the firms. We discuss the conditions under which mergers may or may not be welfare-improving.
Author : Larry Qiu
Publisher :
ISBN 13 :
Total Pages : 26 pages
Book Rating : 4.:/5 (527 download)
Download or read book Product Differentiation, Asymmetric Information and International Mergers written by Larry Qiu and published by . This book was released on 2003 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Kathrin Tiecke
Publisher : GRIN Verlag
ISBN 13 : 3640928652
Total Pages : 89 pages
Book Rating : 4.6/5 (49 download)
Download or read book Mergers and (uncertain) Synergies in Oligopoly written by Kathrin Tiecke and published by GRIN Verlag. This book was released on 2011-05-31 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: Diploma Thesis from the year 2011 in the subject Economics - Micro-economics, grade: 2,0, Humboldt-University of Berlin (Wirtschaftstheorie II), course: VWL - Mikroökonomie, Industrial Organization, language: English, abstract: ...Farell and Shapiro state that there is no necessity for mergers as cooperation and coordination can be achieved at an equivalent level via contracts: “..., modern economic theory observes that virtually anything that can be done with a merger can in principle be done instead with some kind of contract, perhaps a very complex (or restrictive) one.” (Farrell and Shapiro 2001, p. 691)... 6.2 Concluding Remarks ...In the last section I introduce the strand of economic literature that deals with the process of mergers under uncertain efficiency gains. By introducing uncertain synergies to Cournot merger models the merger paradox can be solved in all above presented approaches and compared to the deterministic models there is a wider scope of profitable mergers. The informational asymmetry after the merger benefits the merger members although efficiency gains may be not obtained post merger. Thus mergers are more likely to be beneficial compared to the case where uncertain efficiency gains are not assumed. It has been shown that the incentives to merger coincide with the degree of uncertainty and when firms are aware of this uncertainty they are able to prepare for the post-merger integration process much better since post-merger actions can be specified more accurately. Any merger with uncertain synergies that needs to be approved by competition agencies can positively affect the approval by evaluating the uncertain efficiency gains with the required post-merger process... ...this may be an attempt to replicate the merger failures in the real world. To analyze further the role of uncertain synergies, models that depart from the one-shut nature should be implemented. This might give insights why merger formations appear wavelike and if the equilibrium changes when non-merged firms adjust as soon as they observe the true type of their (new) rival. As the world has become realistically more transparent the unmerged firms may observe rather fast whether they face a more or less efficient rival and so the time horizon should ex ante alter the expected profits of the market players compared to the one-shot nature of the standard Cournot game. The question what types of firms, the most or the least efficient ones are involved in a merger remains unanswered as there are ambiguous results in the theory of endogenous merger formation. The empirical observations also do not support the theory that low-performing firms are the preferred target for acquisitions.
Author : Emilie Dargaud
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Mergers and Collusion with Asymmetric Capacities written by Emilie Dargaud and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: When it examines the risk of coordinated effects, an antitrust authority will usually compare the situation where the merger is accepted with an attendant risk of collusion with the benchmark case in which competition is present ex-post. The main objective of this paper is to show that the antitrust authority must take into account the possibility for firms to collude if a merger is rejected. In fact, firms can have incitations to make collusion ex-post (after a rejection of a merger) whereas they would not make collusion ex-ante. All the papers on mergers and collusion tend to look at a minimal discount factor threshold for collusion to be sustained. This article does not only suggest necessary and sufficient conditions for collusion to be enforced but it also analyses the choice which firms have as to whether to collude. We consider an industry with cost-asymmetric firms and we study the analysis of collusion under leniency programmes.
Author : Miguel Alexandre Fonseca
Publisher :
ISBN 13 :
Total Pages : 26 pages
Book Rating : 4.:/5 (129 download)
Download or read book Mergers, Asymmetries and Collusion written by Miguel Alexandre Fonseca and published by . This book was released on 2008 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the impact of mergers in experimental Bertrand-Edgeworth oligopolies. Treatment variables are the number of firms (two, three) and the distribution of industry capacity (symmetric, asymmetric). Consistent with a dynamic collusion model, we find that, even though they are more concentrated, asymmetric markets exhibit lower prices than symmetric markets with the same number of firms. Consistent with the static Nash prediction, duopolies charge higher prices than triopolies when we control for (a)symmetry. The overall impact of a merger (which comprises both fewer firms and an asymmetry) is anti-competitive but the price increase is not significant.
Author : Mattias Ganslandt
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Endogenous Mergers and Collusion in Asymmetric Market Structures written by Mattias Ganslandt and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent empirical evidence shows that cartels are often asymmetric, while cartel theory suggests that firm symmetry is conducive to collusion. Including an indivisible cost of cartelization, we show that medium asymmetric market structures are more conducive to collusion, since they balance the small firms' incentives to stay in the cartel against the need to cover the cartel leaders' indivisible cartelization cost. Using an endogenous merger model, we also show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with a higher risk of collusion. Current antisymmetry merger policy can thus be counterproductive.
Author : Daisuke Hirata
Publisher :
ISBN 13 :
Total Pages : 30 pages
Book Rating : 4.:/5 (129 download)
Download or read book Asymmetric Bertrand-Edgeworth Oligopoly and Mergers written by Daisuke Hirata and published by . This book was released on 2014 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates mixed strategy equilibria in a capacity-constrained price competition among three firms. It is shown that the equilibria in an asymmetric oligopoly are substantially different from those in a duopoly and symmetric oligopoly. In an asymmetric triopoly, it is possible that (i) a continuum of equilibria exits and that (ii) the lowest price of the smallest firm is higher than that of the others and the smallest firm earns more than the max-min profit in undominated strategies. In particular, the second finding sheds light on a new pricing incentive in Bertrand competitions. As an application, the equilibrium characterizations give rise to a new class of merger paradoxes.
Author : Tina Kao
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Welfare-Enhancing Mergers Under Product Differentiation written by Tina Kao and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we consider a model of duopoly with differentiated products to examine the welfare effects of a merger between two asymmetric firms. We find that, for quantity competition, the parameter range for welfare-enhancing merger widens if the products are closer substitutes. On the other hand, mergers are never welfare enhancing in this setting when firms compete in prices.
Author : Brett William Hollenbeck
Publisher :
ISBN 13 :
Total Pages : 240 pages
Book Rating : 4.:/5 (882 download)
Download or read book Essays on Competition Under Asymmetric Information written by Brett William Hollenbeck and published by . This book was released on 2014 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation presents research on issues of competition and market structure in economics, and in particular considers the role of asymmetric information in firm competition. This includes asymmetric information among firms, between firms and regulators and between consumers and firms. In the course of this I adapt and expand on recently developed methods for solving, estimating and simulating dynamic models of firm behavior. Finally, this dissertation focuses attention on firms' motivations for and the consequences of horizontal expansion, both in the form of horizontal mergers in a differentiated goods market and in the form of horizontal chain affiliation. This research proceeds in three steps. In Chapter 2 I explore and document consumers growing ability to use new online reputation mechanisms to both share their experiences with a wide variety of firms and gain information from other consumers' shared experiences. In Chapter 3 I present a theoretical model of horizontal mergers in a dynamic industry setting. I use this model to answer a question that increasingly interests antitrust policymakers concerned with innovation: In a concentrated industry, does allowing rival firms to merge increase or decrease total investment? This model has two important features. First, the environment is fully dynamic, and second, I allow mergers to occur endogenously. In Chapter 4, I combine many of the concepts from Chapters 2 and 3 into on piece of research to address the question: why do firms organize into chains? I use of combination of reduced form and structural dynamic methods to examine possible answers to this question in the context of the hotel industry. In particular, I take advantage of recent advances in estimating dynamic industry models to show that there is no evidence in favor of the traditional explanation for horizontal expansion, economies of scale or cost efficiencies. Instead, using a detailed examination of hotel revenue along with firm and market data, I show that chain firms have a substantial demand side advantage resulting from the fact that consumers frequently have little information on firm quality. In this industry, then, asymmetric information seems to not only matter for chain affiliation, it is the only factor that matters.
Author : Luke M. Froeb
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Mergers Among Asymmetric Bidders written by Luke M. Froeb and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we derive estimators of, and closed-form (non-integral) expressions for, the distribution of bids in an extreme value, asymmetric, second-price, private-values auction. In equilibrium, prices (winning bids) and shares (winning probabilities) have a simple monotonic relationship--higher-value firms win more frequently and at better prices than lower-value firms. Since the extreme value distribution is closed under the maximum function, the value of the merged coalition also has an extreme value distribution and thus lies on the same price/share curve. Consequently, merger price effects can be computed as a movement along the price/share curve, from the average pre-merger share to the post-merger aggregate share. The parameter determining how much winning prices change is the standard deviation of the extreme value component. Merger efficiency claims can be benchmarked against the marginal cost reductions necessary to offset merger price effects.
Author : Thomas Borek
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Mergers Under Asymmetric Information - is There a Lemons Problem? written by Thomas Borek and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze a Bayesian merger game under two-sided asymmetric information about firm types. We show that the standard prediction of the lemons market model-if any, only low-type firms are traded-is likely to be misleading: Merger returns, i.e. the difference between pre- and post-merger profits, are not necessarily higher for low-type firms. This has two implications. First, under very general conditions, equilibria exist where mergers take place, and there is no presumption that there is ineffciently low trade. Second, in these equilibria it is typically not the case that only low-type firms enter an agreement.
