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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/30438
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| Title: | | Upstream horizontal mergers and efficiency gains  |
| Authors: | | Milliou, Chrysovalantou Pavlou, Apostolis |
| Issue Date: | | 2009 |
| Series/Report no.: | | CESifo working paper 2748 |
| Abstract: | | We study upstream horizontal mergers and their potential efficiency gains. We show that an upstream horizontal merger can give rise to two efficiency-enhancing effects when firms trade through two-part tariffs. It increases R&D investments and decreases wholesale prices when downstream competition is not too strong. Examining whether the merger's potential efficiency gains can overcome its anti-competitive effects in terms of welfare, we show that when firms merge usually both of the above mentioned efficiencies are realized and they are passed on to consumers. This holds to a lesser extend when firms trade through linear contracts. |
| Subjects: | | horizontal mergers vertical relations efficiency gains two-part tariffs merger policy |
| JEL: | | L41 L42 L22 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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