Preemptive mergers under spatial competition

Research output: Contribution to journalArticle

35 Citations (Scopus)

Abstract

Mergers for market power generally benefit outsider firms more than participating firms. Hence, outsiders should welcome such mergers between their competitors but, frequently, this is not the case. Under spatial competition some outsiders gain more than the participating firms but others might benefit less. Thus, if the number of admissible mergers is limited, firms may decide to merge to preempt rival mergers. This paper studies the incentives for preemptive merger by firms engaged in spatial competition.
Original languageEnglish
Pages (from-to)1601-1622
Number of pages22
JournalInternational Journal of Industrial Organization
Volume21
Issue number10
DOIs
Publication statusPublished - 1 Jan 2003

Keywords

  • Endogenous mergers
  • Spatial competition

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