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Mergers in durable goods industries

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  • Sagasta, Amagoia
  • Saracho, Ana I.

Abstract

This paper is concerned with the study of durability as an aspect of competition and market structure that contributes to determining the incentives for mergers. We find that relative to the incentives in industries that produce non-durable goods the durability of the good produced by an industry enhances the incentive for mergers in the presence of intertemporal consistency problems. Further, the analysis indicates that in durable good markets a good antitrust policy should combine a restriction to rent solely with a prudent merger policy.

Suggested Citation

  • Sagasta, Amagoia & Saracho, Ana I., 2008. "Mergers in durable goods industries," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 691-701, December.
    • Handle: RePEc:eee:jeborg:v:68:y:2008:i:3-4:p:691-701
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    References listed on IDEAS

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    Cited by:

    1. Kai A.Konrad, 2010. "Merger Profitability in Industries with Brand Portfolios and Loyal Customers," Korean Economic Review, Korean Economic Association, vol. 26, pages 5-26.
    2. Gerstle, Ari D. & Waldman, Michael, 2016. "Mergers in durable-goods industries: A re-examination of market power and welfare effects," Research in Economics, Elsevier, vol. 70(4), pages 677-692.
    3. Amagoia Sagasta, 2019. "Cooperative R&D with durable goods," Journal of Economics, Springer, vol. 128(3), pages 239-258, December.
    4. Evangelos Rouskas, 2023. "Mergers, multiperiod Cournot competition, and Coasian dynamics," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 270-286, April.

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