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- Title
WELFARE-ENHANCING MERGERS UNDER PRODUCT DIFFERENTIATION.
- Authors
KAO, TINA; MENEZES, FLAVIO
- 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.
- Subjects
MERGERS &; acquisitions; WELFARE economics; PRODUCT differentiation; DUOPOLIES; ECONOMIC competition; SUBSTITUTION (Economics); ECONOMIC policy
- Publication
Manchester School (1463-6786), 2010, Vol 78, Issue 4, p290
- ISSN
1463-6786
- Publication type
Article
- DOI
10.1111/j.1467-9957.2009.02145.x