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June 10, 2011
Profitability of Horizontal Mergers in the Presence of Price Stickiness
Posted by D. Daniel Sokol
Hamideh Esfahani (University of Bologna) addresses Profitability of Horizontal Mergers in the Presence of Price Stickiness.
ABSTRACT: In this paper, we investigate the profitability of horizontal mergers of firms with price adjustments. We take a di¤erential game approach and both the open-loop as well as the closed-loop equlibria are considered. We show that the merger incentive is determined by how fast the price adapts to the equilibrium level.
June 10, 2011 | Permalink
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