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Welfare-enhancing mergers under product differentiation

Kao, Tina; Menezes, Flavio

Description

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.

CollectionsANU Research Publications
Date published: 2010
Type: Journal article
URI: http://hdl.handle.net/1885/64514
Source: Manchester School, The
DOI: 10.1111/j.1467-9957.2009.02145.x

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