Zikos, Vasileios.. Merger, innovation and market power. Master's Degree(). University of the Thai Chamber of Commerce. Central Library. : University of the Thai Chamber of Commerce, 2019.
Abstract:
In this paper, we consider a duopoly with product differentiation and examine the interaction between merger and innovation incentives. The analysis reveals that a merger tends to discourage innovation, unless the investment cost is sufficiently low. This result holds whether
or not side payments between firms are allowed. When side payments are permitted, we reconfirm a standard result in the literature which suggests that a bilateral merger-to-monopoly is always profitable. When side payments are not permitted, however, we show that a merger is not profitable when the efficiency of the new technology is relatively high and the investment cost is below a particular level.
University of the Thai Chamber of Commerce. Central Library