#2294. The effect of horizontal mergers, when firms compete in prices and investments

September 2026publication date
Proposal available till 30-05-2025
4 total number of authors per manuscript5020 $

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Journal’s subject area:
Economics, Econometrics and Finance (miscellaneous);
Strategy and Management;
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Abstract:
Motivated by a number of high-profile antitrust cases, we study mergers when firms offer differentiated products and compete in prices and investments. Since the net effect of the merger is a priori ambiguous, we use aggregative game theory to sign it: we find that absent efficiency gains, the merger always reduces total investments and consumer surplus. We also prove that there exist classes of models for which the results obtained with cost-reducing investments are equivalent to those with quality-enhancing investments.
Keywords:
Competition; Horizontal mergers; Innovation; Investments

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