Arbeitspapier
Weddings with uncertain prospects: Mergers under asymmetric information
We provide a framework for analyzing bilateral mergers when there is two-sided asymmetric information about firms' types. We show that there is always a no-merger equilibrium where firms do not consent to a merger, irrespective of their type. There may also be a cut-off equilibrium if the expected merger returns satisfy a suitable single crossing condition, which will hold if a firm's merger returns are essentially monotone decreasing in its type. Applying our analysis to the linear Cournot model, we show how the merger pattern depends on the cost effects of mergers, the extent of uncertainty, and the way profits are split. Specifically, we show how increasing uncertainty about competitor types may foster mergers as firms hope for strong rationalization effects.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 0213
- Klassifikation
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Asymmetric and Private Information; Mechanism Design
Oligopoly and Other Imperfect Markets
Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
- Thema
-
merger
asymmetric information
oligopoly
single crossing
Übernahme
Asymmetrische Information
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Borek, Thomas
Buehler, Stefan
Schmutzler, Armin
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Zurich, Socioeconomic Institute
- (wo)
-
Zurich
- (wann)
-
2004
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Borek, Thomas
- Buehler, Stefan
- Schmutzler, Armin
- University of Zurich, Socioeconomic Institute
Entstanden
- 2004
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