Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102141
Authors: 
Milliou, Chrysovalantou
Sandonis, Joel
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4932
Abstract: 
We study final product manufacturers' incentives to introduce new products into the market and how they are affected by a merger among them. We show that when manufacturers distribute their products through multi-product retailers, a manufacturers merger, although it leads to an increase in the wholesale prices, it can enhance product variety. The merger generated product variety efficiencies though arise only when vertical relations are present: when manufacturers sell directly their products to consumers, a merger never results into more product variety. Still, both in the presence and in the absence of vertical relations, a manufacturers merger is harmful to consumers and welfare.
Subjects: 
horizontal mergers
product variety
vertical relations
JEL: 
L11
L13
L41
L42
Document Type: 
Working Paper

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