Non-Horizontal Mergers with Investments into Compatibility
34 Pages Posted: 9 May 2019
Date Written: 2019
We set up a model to analyze the effects of mergers between sellers of complementary components where firms invest in compatibility and can engage in bundling. We consider the impact of merger on prices, investment and consumer surplus. We also analyse when the merged firm may have an incentive and ability to foreclose rivals.
Keywords: mergers, complementary goods, welfare effects, foreclosure, compatibility
JEL Classification: L130, L410
Suggested Citation: Suggested Citation