Jullien, Bruno and Lefouili, Yassine (2018) Mergers and investments in new products. TSE Working Paper, n. 18-949, Toulouse

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We investigate the impact of a horizontal merger between two competitors on their incentives to invest in R&D that generates 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 greater than the individual profit of a firm when both firms innovate in the no-merger scenario. Applying this result to the Hotelling model, we find that a merger spurs innovation if the degree of product differentiation is not too high, and show that a merger can be beneficial to consumers.

Item Type: Monograph (Working Paper)
Language: English
Date: August 2018
Place of Publication: Toulouse
Uncontrolled Keywords: Horizontal Mergers, Product Innovation, R&D Investments.
JEL Classification: K21 - Antitrust Law
L13 - Oligopoly and Other Imperfect Markets
L40 - General
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 07 Sep 2018 09:13
Last Modified: 01 Jun 2023 07:05
OAI Identifier: oai:tse-fr.eu:32923
URI: https://publications.ut-capitole.fr/id/eprint/26230
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