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Title:The Incentives for Takeover in Oligopoly PDF Logo
Authors:Inderst, Roman
Wey, Christian
Issue Date:2004
Series/Report no.:DIW-Diskussionspapiere 423
Abstract:We present a model of takeover where the target optimally sets its reserve price. Under relatively standard symmetry restrictions, we obtain a unique equilibrium. The probability of takeover is only a function of the number of firms and of the insiders´ share of total industry gains due to the increase in concentration. Our main application is to the linear Cournot and Bertrand models. A takeover is more likely under Bertrand competition if goods are substitutes and more likely under Cournot competition if goods are complements.
Subjects:Takeover bidding
Merger incentives
Oligopoly
JEL:L13
D43
L41
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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