Profitability of Horizontal Mergers in Trigger Strategy Game
Cesi Berardino
CEIS Working Papers
It is shown that, in a dynamic competition, an exogenous horizontal merger is
profitable even if a small share of active firms merge. However, each firm has
incentive to remain outside the merger because it would benefit more (Insiders'
dilemma). We show
Number: 229
Date: Wednesday, March 1, 2006
Revision Date: Wednesday, March 1, 2006