Entry for merger with flexible manufacturing: Implications for competition policy
نویسنده
چکیده
This paper studies a model of product variety with flexible manufacturers when, contrary to prior work, atomistic entry occurs prior to horizontal integration. In this model, more lax antitrust laws that allow for fewer and more concentrated merged firms lead to a greater extent of excess entry. Optimal policy permits no horizontal mergers when demand is perfectly inelastic, but may permit some horizontal integration when demand is price responsive. © 2006 Elsevier B.V. All rights reserved. JEL classification: D42; D43; L11; L12; L13; Entry
منابع مشابه
Merger Policy , Entry , and Entrepreneurship
We assess the impact of merger policy on entry and entrepreneurship. Facing uncertainty about its prospects and foreseeing that it may wish to quit should profitability prove poor, a rational entrant considers possible exit routes. Horizontal merger reduces competition subsequently, lowering welfare in the short run, but also provides a valuable exit route. By facilitating exit and thus raising...
متن کاملRobin Mason University of Southampton and CEPR Helen Weeds University of Essex and CEPR 16 August 2007
We assess the impact of merger policy on entry and entrepreneurship. Facing uncertainty about its prospects and foreseeing that it may wish to quit should profitability prove poor, a rational entrant considers possible exit routes. Horizontal merger reduces competition subsequently, lowering welfare in the short run, but also provides a valuable exit route. By facilitating exit and thus raising...
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