Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18160
Authors: 
Inderst, Roman
Wey, Christian
Year of Publication: 
2004
Series/Report no.: 
DIW Discussion Papers 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

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