Profitability of Horizontal Mergers in the Presence of Price Stickiness
affiliation not provided to SSRN
April 5, 2011
Quaderni DSE Working Paper No. 747
In this paper, we investigate the profitability of horizontal mergers of firms with price adjustments. We take a differential game approach and both the open-loop as well as the closed-loop equlibria are considered. We show that the merger incentive is determined by how fast the price adapts to the equilibrium level.
Number of Pages in PDF File: 16
Keywords: Differential game, Sticky price
JEL Classification: C73, D43, L13working papers series
Date posted: May 17, 2011
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