Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81184
Authors: 
Fridolfsson, Sven-Olof
Year of Publication: 
2007
Series/Report no.: 
IFN Working Paper 694
Abstract: 
In a framework where mergers are mutually excluding, I show that firms pursue anti- rather than (alternative) pro-competitive mergers. Potential outsiders to anti-competitive mergers refrain from pursuing pro-competitive mergers if the positive externalities from anti-competitive mergers are strong enough. Potential outsiders to pro-competitive mergers pursue anti-competitive mergers if the negative externalities from the pro-competitive mergers are strong enough. Potential participants in anti-competitive mergers are cheap targets due to the risk of becoming outsiders to pro-competitive mergers. Firms may even pursue an unprofitable and anti-competitive merger, when alternative mergers are profitable and pro-competitive.
Subjects: 
Anti- and Pro-Competitive Mergers
Consumers' Welfare
Coalition Formation
Endogenous Split of Surplus
JEL: 
L12
L13
L41
Document Type: 
Working Paper

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