Welfare-enhancing mergers under product differentiation
Date
2010
Authors
Kao, Tina
Menezes, Flavio
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Wiley-Blackwell
Abstract
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.
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Manchester School, The
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Journal article
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2037-12-31
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