| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP9374 |
| DP9374 Search Costs, Demand-Side Economies and the Incentives to Merge under Bertrand Competition | |
| José-Luis Moraga-González; Vaiva Petrikaite | |
| 发表日期 | 2013-03-03 |
| 出版年 | 2013 |
| 语种 | 英语 |
| 摘要 | We study the incentives to merge in a Bertrand competition model where firms sell differentiated products and consumers search sequentially for satisfactory deals. In the pre-merger symmetric equilibrium, consumers visit firmsrandomly. However, after a merger, because insiders raise their prices more than the outsiders, consumers start searching for good deals at the non-merging stores, and only when they do not find a satisfactory product there they visit the merging firms. As search costs go up, consumer traffic from the non-merging firms to the merged ones decreases and eventually mergers become unprofitable. This new merger paradox can be overcome if the merged entity chooses to stock each of its stores with all the products of the constituent firms, which generates sizable search economies. We show that such demand-side economies can confer the merging firms a prominent position in the marketplace, in which case their price may even be lower than the price of the non-merging firms. In that situation, consumers start searching for a satisfactory good at the merged entity and the firms outside the merger lose out. When search economies are sufficiently large, a merger is beneficial for consumers too, and overall welfare increases. |
| 主题 | Industrial Organization |
| 关键词 | Mergers Insiders Outsiders Short-run Long-run Consumer search Demand-side economies Economies of search Orders of search Sequential search |
| URL | https://cepr.org/publications/dp9374 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/538209 |
| 推荐引用方式 GB/T 7714 | José-Luis Moraga-González,Vaiva Petrikaite. DP9374 Search Costs, Demand-Side Economies and the Incentives to Merge under Bertrand Competition. 2013. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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