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Bargain for Exit

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Authors
Jun, ByoungHeon; Yoon, ChangHo
Issue Date
1993
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 6 (No. 2 1993): 115-126
Keywords
exit process; SPE; efficient exit
Abstract
We examine an alternate move bargaining model of an exit process in a declining industry. We show that when firms negotiate with each other, the less profitable firm will be merged to be closed down. We find that the size of the firm will affect the division of the surplus created by the merger through cost effects. The smaller firm extracts more surplus than its value under continued operation because it has cost advantage.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1015
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.06(2) (Summer 1993)
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