Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93782
Authors: 
Ding, Wei
Fan, Cuihong
Wolfstetter, Elmar G.
Year of Publication: 
2010
Series/Report no.: 
SFB/TR 15 Discussion Paper 336
Abstract: 
We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target. Two auction rules are considered: standard first-price and profit-share auctions, supplemented by entry fees. Since non-merged firms benefit from a merger if the synergies are low, bidders are subject to a positive externality. Nevertheless, pooling does not occur; and the profit-share auction is strictly more profitable than the first-price auction, regardless of whether firms observe the synergy parameter or only the winning bid before they play the oligopoly game.
Subjects: 
Horizontal mergers
takeovers
auctions
externalities
oligopoly
JEL: 
G34
D44
H23
L13
D43
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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