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Horizontal Mergers in the Spokes Model

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  • Emilie Dargaud
  • Carlo Reggiani

Abstract

The theoretical analysis of merger poses a number of paradoxes. If firms compete in prices, a merger is profitable for all parties involved. Outsiders, however, free-ride and earn higher profits than insiders. The "spokes model" is a recently introduced framework to study n-firms spatial competition. This paper shows that in this model free-riding does not necessarily take place.

Suggested Citation

  • Emilie Dargaud & Carlo Reggiani, "undated". "Horizontal Mergers in the Spokes Model," Discussion Papers 09/12, Department of Economics, University of York.
    • Handle: RePEc:yor:yorken:09/12
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    References listed on IDEAS

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    More about this item

    Keywords

    horizontal mergers; spokes model; mergers paradoxes.;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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