Mergers and Investments in New Products

Jullien, Bruno and Lefouili, Yassine (2018) Mergers and Investments in New Products. TSE Working Paper, n. 18-949, Toulouse

[img]
Preview
Text
Download (236kB) | Preview
Official URL: http://tse-fr.eu/pub/32923

Abstract

We investigate the impact of a horizontal merger between two competitors on their incentives to develop new products. We show that a merger raises the incentives to innovate if and only if the merged entity's incremental gain from a second innovation is larger than the individual profit of an innovator when both firms innovate in the no-merger scenario. Applying this result to the Hotelling model, we find that a merger spurs innovation and can be beneficial to consumers if the degree of product differentiation is positive but not too high.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2018
Place of Publication: Toulouse
Uncontrolled Keywords: Merger Policy, Product Innovation, R&D Investments
JEL codes: K21 - Antitrust Law
L13 - Oligopoly and Other Imperfect Markets
L40 - General
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 07 Sep 2018 09:13
Last Modified: 04 Apr 2019 04:10
OAI ID: oai:tse-fr.eu:32923
URI: http://publications.ut-capitole.fr/id/eprint/26230

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year