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Author: | Persson, L. |
Title: | Predation and mergers: is merger law counterproductive? |
Journal: | European Economic Review
2004 : APR, VOL. 48:2, p. 239-258 |
Index terms: | Mergers |
Freeterms: | Predation |
Language: | eng |
Abstract: | In eliminating revivals, firms can use two types of business strategies. This article provides two explanations why predation is rational when a merger is an alternative and widens the discussion to a multi-firm setting. The article argues that predation allows the costs to be spread out and is less apt to the free-rider problem. Secondly predation may limit the negative effects of the bidding competition for the preys assets. |
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