Scandinavian Working Papers in Economics

Working Paper Series,
Research Institute of Industrial Economics

No 694: Anti- versus Pro-Competitive Mergers

Sven-Olof Fridolfsson ()
Additional contact information
Sven-Olof Fridolfsson: Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

Abstract: In a framework where mergers are mutually excluding, I show that firms pursue anti- rather than (alternative) pro-competitive mergers. Potential outsiders to anti-competitive mergers refrain from pursuing pro-competitive mergers if the positive externalities from anti-competitive mergers are strong enough. Potential outsiders to pro-competitive mergers pursue anti-competitive mergers if the negative externalities from the pro-competitive mergers are strong enough. Potential participants in anti-competitive mergers are cheap targets due to the risk of becoming outsiders to pro-competitive mergers. Firms may even pursue an unprofitable and anti-competitive merger, when alternative mergers are profitable and pro-competitive.

Keywords: Anti- and Pro-Competitive Mergers; Consumers' Welfare; Coalition Formation; Endogenous Split of Surplus

JEL-codes: L12; L13; L41

43 pages, February 5, 2007

Full text files

wp694.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Elisabeth Gustafsson ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:34:32.