SHERP

General Analysis of Horizontal Merger

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Authors
Okuguchi, Koji; Yamazaki, Takeshi
Issue Date
1994
Publisher
Seoul Journal of Economics
Citation
Seoul Journal of Economics 7 (No. 3 1994): 279-290
Keywords
oligopoly; quadratic cost function; Cournot oligopoly
Abstract
A new method of proof is presented for the existence of a unique Cournot equilibrium in oligopoly with a merged entity and independent firms. The method is then applied to derive price-enhancing effect of an increase in the number of merged firms. On the basis of the existence proof and stability condition, a sufficient condition is derived for an increase in the number of merged firms to be profitable. This condition is illustrated for a simple case of linear demand and identical quadratic cost functions. Finally, a numerical example is given.
ISSN
1225-0279
Language
English
URI
http://hdl.handle.net/10371/1044
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College of Social Sciences (사회과학대학)Institute of Economics Research (경제연구소)Seoul Journal of EconomicsSeoul Journal of Economics vol.07(3) (Fall 1994)
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