Publication:
R&D investments fostering horizontal mergers

Simple item page
dc.affiliation.dptoUC3M. Departamento de Economíaes
dc.contributor.authorCabolis, C.
dc.contributor.authorManasakis, C.
dc.contributor.authorMoreno, Diego
dc.contributor.authorPetrakis, Emmanuel
dc.contributor.editorUniversidad Carlos III de Madrid. Departamento de Economíaes
dc.date.accessioned2016-07-04T12:52:19Z
dc.date.available2016-07-04T12:52:19Z
dc.date.issued2016-06-01
dc.description.abstractWe study a homogenous good triopoly in which firms first choose their cost-reducing R&D investments and consider alternative merger proposals, and then compete à la Cournot in the ensuing industry. We identify conditions under which both horizontal mergers and non integration are sustained by Coalition-Proof Nash equilibria (CPNE). These conditions involve the effectiveness of the R&D technology, as well as the distribution of the bargaining power between the acquirer and the acquiree, which determine the allocation of the incremental profits generated by the merger. We show that whether firms follow duplicative or complementary research paths, sustaining a merger generally requires a sufficiently effective R&D technology that creates endogenous cost asymmetries and renders the merger profitable, and a moderate distribution of bargaining power that allows to spread the benefits of the merger. We examine the welfare effects of mergers and obtain clear policy guidelines.es
dc.description.sponsorshipWe would like to thank Lindsay McTeague for editorial assistance, and John Geanakoplos, Patrick Rey and participants of research seminars at Düsseldorf Institute for Competition Economics, the Higher School of Economics (Moscow), and the University of Cyprus for helpful comments and suggestions. Part of this work was supported by COST Action IS1104 “The EU in the new economic complex geography: models, tools and policy evaluation”. Moreno acknowledges financial support from the Ministerio Economía y Competitividad (Spain), grants ECO2014-55953-P and MDM2014-0431, and from the Comunidad de Madrid, grant S2015/HUM-3444.en
dc.format.mimetypeapplication/pdf
dc.identifier.issn2340-5031es
dc.identifier.urihttps://hdl.handle.net/10016/23280
dc.identifier.uxxiDT/0000001467es
dc.language.isoenges
dc.relation.ispartofseriesUC3M working papers. Economicses
dc.relation.ispartofseries16-09es
dc.relation.projectIDGobierno de España. ECO2014-55953-P
dc.relation.projectIDGobierno de España. MDM2014-0431
dc.relation.projectIDComunidad de Madrid. S2015/HUM-3444/MADECO-CM
dc.rightsAtribución-NoComercial-SinDerivadas 3.0 España*
dc.rights.accessRightsopen access
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/3.0/es/*
dc.subject.otherHorizontal Mergersen
dc.subject.otherCost-Reducing Innovationen
dc.subject.otherEndogenous Efficiency Gainsen
dc.subject.otherAntitrusten
dc.subject.otherCoalition-Proof Nash Equilibriumen
dc.titleR&D investments fostering horizontal mergersen
dc.typeworking paper*
dc.type.hasVersionAO*
dspace.entity.typePublication
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
we1609.pdf
Size:
662.64 KB
Format:
Adobe Portable Document Format
Download
Collections
DE - Working Papers. Economics. WE