4.7 Article

Horizontal mergers under uniform resource constraints

Journal

Publisher

ELSEVIER SCI LTD
DOI: 10.1016/j.jretconser.2021.102697

Keywords

Uniform capacity (resource) constraints; Horizontal merger; Consumer surplus; Social welfare

Categories

Funding

  1. National Natural Science Foundation of PRC [71771057, 72003044, 72003045]

Ask authors/readers for more resources

The article discusses the impact of resource constraints on horizontal mergers, emphasizing the importance of cautiousness in industries with scarce resources. Additionally, it highlights the higher threshold values for mergers aimed at maximizing consumer surplus under resource constraints.
Resource constraints have a vertical influence on a firm's competition and it is important to address the issue of horizontal mergers with scarce resources. This article highlights the effects of uniform resource constraints on horizontal mergers with game theory methods. First, the threshold values for the firms to accept the merger, increasing consumer surplus, and increasing social welfare are presented and compared. Second, the threshold value to merge for consumer surplus maximization is larger than that for profit incentive mergers without resource constraints. Thus, under unbinding resource industries, mergers reduce consumer surplus and it is necessary to implement antitrust. Third, resource constraints deter mergers. Finally, under binding capacity (or resource) constraints, the threshold value for firms to merge is larger than that for the social optimality. Therefore, industries with scare resource should avoid antitrust.

Authors

I am an author on this paper
Click your name to claim this paper and add it to your profile.

Reviews

Primary Rating

4.7
Not enough ratings

Secondary Ratings

Novelty
-
Significance
-
Scientific rigor
-
Rate this paper

Recommended

No Data Available
No Data Available