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| Author: | Fonseca, M. A. Normann, H-T. |
| Title: | Mergers, asymmetries and collusion: Experimental evidence |
| Journal: | Economic Journal
2008 : MAR, VOL. 118:527, p. 387-400 |
| Index terms: | competition duopoly dynamic models market structure mergers oligopoly price level |
| Language: | eng |
| Abstract: | Using the amount of firms and the distribution of industry capacity as treatment variables, this paper examines the effect of mergers in experimental Bertrand-Edgeworth oligopolies. The results show that asymmetric markets produce lower prices than symmetric markets with same number of companies. These findings are compatible with a dynamic collusion model. Following the Nash prediction, duopolies have higher prices than triopolies when the (a)symmetry is controlled. The results indicate that merger's impact is anti-competitive. However, the price increase associated with mergers is small. |
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