search query: @author Sörgard, L. / total: 4
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| Author: | Nilssen, T. Sørgard, L. |
| Title: | Sequential horizontal mergers |
| Journal: | European Economic Review
1998 : NOV, VOL. 42:9, p. 1683-1702 |
| Index terms: | MERGERS COMPETITION POLICY MODELS |
| Language: | eng |
| Abstract: | This paper's purpose is to analyse the interdependence of merger decisions over time. The Fudenberg-Tirole taxonomy of business strategies is used. In a linear Cournot model, all four business strategies are retrieved of the general taxonomy by allowing for cost savings due to merger. It is found that the prospects of a subsequent merger decision have an ambiguous effect on the profitability of the first merger. It is also shown, in the general framework, that, when merger decisions are interdependent over time, the condition of Farrell and Shapiro overestimates a merger's actual external effect. |
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