Abstract

http://ssrn.com/abstract=2149051
 


 



Endogenous Mergers and Collusion in Asymmetric Market Structures


Mattias Ganslandt


Centre for European Law and Economics; Research Institute of Industrial Economics; University of Colorado at Boulder - Department of Economics

Lars Persson


Research Institute of Industrial Economics (IFN); Centre for Economic Policy Research (CEPR)

Helder Vasconcelos


Universidade do Porto - Faculdade de Economia (FEP)

October 2012

Economica, Vol. 79, Issue 316, pp. 766-791, 2012

Abstract:     
Recent empirical evidence shows that cartels are often asymmetric, while cartel theory suggests that firm symmetry is conducive to collusion. Including an indivisible cost of cartelization, we show that medium asymmetric market structures are more conducive to collusion, since they balance the small firms' incentives to stay in the cartel against the need to cover the cartel leaders' indivisible cartelization cost. Using an endogenous merger model, we also show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with a higher risk of collusion. Current antisymmetry merger policy can thus be counterproductive.

Number of Pages in PDF File: 26

Accepted Paper Series


Date posted: September 19, 2012  

Suggested Citation

Ganslandt, Mattias and Persson, Lars and Vasconcelos, Helder, Endogenous Mergers and Collusion in Asymmetric Market Structures (October 2012). Economica, Vol. 79, Issue 316, pp. 766-791, 2012. Available at SSRN: http://ssrn.com/abstract=2149051 or http://dx.doi.org/10.1111/j.1468-0335.2012.00937.x

Contact Information

Mattias Ganslandt (Contact Author)
Centre for European Law and Economics ( email )
Rue du Luxembourg 3
Bruxelles, BE-1000
Belgium
+32 479 639 383 (Phone)
+32 2 888 9161 (Fax)
HOME PAGE: http://www.celec.eu
Research Institute of Industrial Economics ( email )
Box 55665
S-102 15 Stockholm
Sweden
+46 8 665 4500 (Phone)
+46 8 665 4599 (Fax)
HOME PAGE: http://www.industrialeconomics.se/mg
University of Colorado at Boulder - Department of Economics ( email )
Campus Box 256
Boulder, CO 80309
United States
303-4927588 (Phone)
HOME PAGE: http://www.mattiasganslandt.com
Lars Persson
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Helder Vasconcelos
Universidade do Porto - Faculdade de Economia (FEP) ( email )
Rua Dr. Roberto Frias
s/n
4200-464 Porto, 4200-464
Portugal
HOME PAGE: http://www.fep.up.pt/docentes/hvasconcelos
Feedback to SSRN


Paper statistics
Abstract Views: 317
Downloads: 1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo5 in 0.266 seconds