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Incentives to merge in asymmetric mixed oligopoly

Author

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  • Kadohognon Sylvain Ouattara

    (ESCA école de management (Casablanca) / Normandie Univ; UNICAEN, CREM, UMR-CNRS 6211)

Abstract

This paper analyzes mergers incentives in an asymmetric mixed oligopoly consisting of two identical private firms and one public firm. It is shown that when there is a technological gap between the public and private firms, both of them will want to merge when the public firm is inefficient and the percentage of the shares owned by private owners after the merger is relatively high. When all firms have identical technology, public and private firms will want to merge when the percentage of the shares owned by private owner in the merged entity is relatively low (Artz et al. 2009). Yet, we show that when the technological gap is high enough, the merger between the public firm and one private firm often includes complete privatization.

Suggested Citation

  • Kadohognon Sylvain Ouattara, 2015. "Incentives to merge in asymmetric mixed oligopoly," Economics Bulletin, AccessEcon, vol. 35(2), pages 885-895.
    • Handle: RePEc:ebl:ecbull:eb-15-00043
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    References listed on IDEAS

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    Cited by:

    1. Bárcena-Ruiz, Juan Carlos & Garzón, María Begoña, 2020. "Mergers between local public firms," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    2. Bisceglia, Michele & Padilla, Jorge & Piccolo, Salvatore & Sääskilahti, Pekka, 2023. "On the bright side of market concentration in a mixed-oligopoly healthcare industry," Journal of Health Economics, Elsevier, vol. 90(C).

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    More about this item

    Keywords

    Mixed Oligopoly; Mergers; Quadratic Cost; Efficiency;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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