Mergers under entry.

From: RAND Journal of Economics | Date: September 22, 2005| Author: Pesendorfer, Martin | Copyright information

I study merger incentives in a dynamic model under the presence of gradual entry. I consider a repeated game with merger decisions in every period and characterize the set of equilibria. I establish two properties: (i) a merger for monopoly may not be profitable; (ii) a merger in a nonconcentrated industry can be profitable. I illustrate the merger welfare implications in the Cournot model.

1. Introduction

* Merger incentives in static oligopoly models have re...

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