Horizontal Merger for Bargaining Position: Relative Size, Absolute Size, and Bargaining Power Effects

7 Pages Posted: 12 Jan 2005

See all articles by Nodir Adilov

Nodir Adilov

Purdue University Fort Wayne

Peter J. Alexander

Federal Communications Commission

Date Written: July 11, 2004

Abstract

We construct a simultaneous bilateral bargaining model and demonstrate analytically that if bargaining power is any constant across a group of buyers, then bargaining position will not be improved through merger in the absence of relative size effects. However, differences in post-merger bargaining power can generate significant positive differences in post-merger bargaining position, a result that should be of interest to regulators.

Keywords: Bargaining Power, Relative Firm Size, Absolute Firm Size, Horizontal Merger

JEL Classification: L41, L50, L51, L82, Z10

Suggested Citation

Adilov, Nodir and Alexander, Peter J., Horizontal Merger for Bargaining Position: Relative Size, Absolute Size, and Bargaining Power Effects (July 11, 2004). Available at SSRN: https://ssrn.com/abstract=644502 or http://dx.doi.org/10.2139/ssrn.644502

Nodir Adilov

Purdue University Fort Wayne ( email )

2101 E. COLISEUM BLVD, NH 260C
FORT WAYNE, IN 46805
United States
2604816497 (Phone)

Peter J. Alexander (Contact Author)

Federal Communications Commission ( email )

Washington, DC 20554
United States

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