Firms horizontal mergers and product differentiation strategies

  • José Méndez Naya Facultad de Ciencias Económicas y Empresariales, Universidad de A Coruña

Abstract

Taking as a reference a simple oligopoly model with differentiated products, in which there are three firms, the purpose of this paper is to complement the existing literature on mergers by proving that the traditional merger paradox can be avoided by assuming that, after the merger, the merging firms increase the existing bilateral product differentiation. In this context, it is proved that a merger could be welfare enhancing by increasing both consumers surplus and merging and non merging firms profits.
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How to Cite
Méndez Naya, J. (2017). Firms horizontal mergers and product differentiation strategies. Estudios de Economía, 44(2), 47-58. Retrieved from http://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/47523/49588
Section
Articles
Published
2017-10-22