S-Space College of Social Sciences (사회과학대학) Institute of Economics Research (경제연구소) Seoul Journal of Economics Seoul Journal of Economics vol.07(3) (Fall 1994)
General Analysis of Horizontal Merger
- Okuguchi, Koji; Yamazaki, Takeshi
- Issue Date
- Seoul Journal of Economics
- Seoul Journal of Economics 7 (No. 3 1994): 279-290
- 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.