An aggregative games approach to merger analysis in multiproduct-firm oligopoly


Nocke, Volker ; Schutz, Nicolas



DOI: https://doi.org/10.3386/w24578
URL: https://www.nber.org/papers/w24578
Additional URL: http://www.volkernocke.com/NS-MAMPF.pdf
Document Type: Working paper
Year of publication: 2018
The title of a journal, publication series: NBER Working Paper
Volume: 24578
Place of publication: Cambridge, MA
Related URLs:
Publication language: English
Institution: School of Law and Economics > VWL, Mikroökonomik (Nocke)
Subject: 330 Economics
Classification: JEL: C70 , C72 , C73,
Abstract: Using an aggregative games approach, we analyze horizontal mergers in a model of multiproduct-firm price competition with nested CES or nested logit demands. We show that the Herfindahl index provides an adequate measure of the welfare distortions introduced by market power, and that the induced change in the naively-computed Herfindahl index is a good approximation for the market power effect of a merger. We also provide conditions under which a merger raises consumer surplus, and conditions under which a myopic, consumer-surplus-based merger approval policy is dynamically optimal. Finally, we study the aggregate surplus and external effects of a merger.

Dieser Eintrag ist Teil der Universitätsbibliographie.




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ORCID: Nocke, Volker ORCID: 0000-0002-5000-6828 ; Schutz, Nicolas

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