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Bourreau, Marc and Jullien, Bruno
(2018)
Mergers, investments and demand expansion.
Economics Letters, vol. 167.
pp. 136-141.
This is the latest version of this item.
Abstract
In this paper, we study the impact of a merger to monopoly on prices and investments. Two single-product firms compete in prices and coverage for a new technology. In equilibrium, one firm covers a larger territory than its competitor with the new technology, leading to singleproduct and multi-product zones, and sets a higher uniform price. If the firms merge, the merged entity can set different prices and coverage for the two products. We find that the merger raises prices and total coverage, but reduces the coverage of the multi-product zone. We also show that the merger can increase total welfare and consumer welfare.
| Item Type: | Article |
|---|---|
| Language: | English |
| Date: | June 2018 |
| Refereed: | Yes |
| Place of Publication: | Amsterdam. |
| Uncontrolled Keywords: | horizontal mergers, investments, competition |
| JEL Classification: | D43 - Oligopoly and Other Forms of Market Imperfection L13 - Oligopoly and Other Imperfect Markets L40 - General |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 22 May 2018 13:10 |
| Last Modified: | 17 Jun 2021 13:50 |
| OAI Identifier: | oai:tse-fr.eu:32603 |
| URI: | https://publications.ut-capitole.fr/id/eprint/25903 |
Available Versions of this Item
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Mergers, investments and demand expansion. (deposited 17 Apr 2018 07:30)
- Mergers, investments and demand expansion. (deposited 22 May 2018 13:10) [Currently Displayed]
