Horizontal Mergers and Product Quality

Arbeitspapier

We study the effects of horizontal mergers when firms compete on quality and price. Two key factors are identified: (i) the magnitude of variable quality costs, and (ii) the relative magnitudes of cross-quality and cross-price effects on demand. The merging firms will increase (reduce) both quality and price if the degree of competition is sufficiently stronger (weaker) on price than on quality. If variable quality costs are sufficiently small, non-merging firms will respond to a merger by either reducing or increasing both price and quality. Welfare implications are not clear-cut and mergers might improve welfare through endogenous fixed-cost savings.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 5406

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Information and Product Quality; Standardization and Compatibility ; Monopolization; Horizontal Anticompetitive Practices
• Thema: horizontal mergers ; quality and price competition

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Brekke, Kurt R. ; Siciliani, Luigi ; Straume, Odd Rune
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2015

Weitere Informationen

• Handle: http://hdl.handle.net/10419/113739
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ