Template-Type: ReDIF-Paper 1.0
Author-Name: J S Heywood
Author-Name-First: J S
Author-Name-Last: Heywood
Author-Name: K Monaco
Author-Name-First: K
Author-Name-Last: Monaco
Author-Name: R Rothschild
Author-Name-First: R
Author-Name-Last: Rothschild
Title: Cooperative merger and joint maximization under sequential entry
Abstract: This paper explores the concept of cooperative merger between two of three entrants that arrive sequentially in a spatial market and practise discriminatory pricing. In this framework, in contrast to much of the theoretical literature, the so-called 'merger paradox' can be comprehensively overturned. We compare our results with those arising when one firm stategically locates two plants. Although this second problem is superficially similar to the first, the underlying behaviour and implications differ in crucial respects. The welfare consequences of all our results are demonstrated.
Creation-Date: 2003
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/CooperativeMerger.pdf
File-Format: application/pdf
Number: 541061
Classification-JEL: 
Keywords: Spatial price discrimination, sequential entry, cooperative merger, merger paradox, multi-plant location
Handle: RePEc:lan:wpaper:541061