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Small Fish Become Big Fish: Mergers in Stackelberg Markets Revisited

Small Fish Become Big Fish: Mergers in Stackelberg Markets Revisited <jats:title>Abstract</jats:title> <jats:p>This paper analyzes, under convex costs, the price effects of mergers involving two Stackelberg followers that together become a leader and revisits the “merger paradox” and the insiders' dilemma. Contrary to what might be expected, prices are more likely to increase with cost convexity than with linear costs. Also, the incentive to free-ride may reappear.</jats:p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The B.E. Journal of Economic Analysis & Policy CrossRef

Small Fish Become Big Fish: Mergers in Stackelberg Markets Revisited

The B.E. Journal of Economic Analysis & Policy , Volume 11 (1) – May 2, 2011

Small Fish Become Big Fish: Mergers in Stackelberg Markets Revisited


Abstract

<jats:title>Abstract</jats:title>
<jats:p>This paper analyzes, under convex costs, the price effects of mergers involving two Stackelberg followers that together become a leader and revisits the “merger paradox” and the insiders' dilemma. Contrary to what might be expected, prices are more likely to increase with cost convexity than with linear costs. Also, the incentive to free-ride may reappear.</jats:p>

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Publisher
CrossRef
ISSN
1935-1682
DOI
10.2202/1935-1682.2817
Publisher site
See Article on Publisher Site

Abstract

<jats:title>Abstract</jats:title> <jats:p>This paper analyzes, under convex costs, the price effects of mergers involving two Stackelberg followers that together become a leader and revisits the “merger paradox” and the insiders' dilemma. Contrary to what might be expected, prices are more likely to increase with cost convexity than with linear costs. Also, the incentive to free-ride may reappear.</jats:p>

Journal

The B.E. Journal of Economic Analysis & PolicyCrossRef

Published: May 2, 2011

There are no references for this article.