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Abstract: Market Concentration, Multi-Market Participation and Mergers in Network Industries
Abstract
Market Concentration, Multi-Market Participation and Mergers in Network Industries
The Review of Network Economics
Vol. 4, Issue 2 - June 2005, pp 129 - 141
Author
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Dennis L. Weisman
Department of Economics, Kansas State University
E-mail: [email protected] |
Abstract
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We use a Cournot model with complementary demands to derive sufficient conditions for mergers that increase market concentration and multi-market participation to lower prices, raise industry profits and hence increase economic welfare. Notably, these findings do not depend upon the realization of merger economies. This analysis may have special relevance for mergers in network industries, including the telecommunications and transportation industries, wherein policymakers have expressed concern about recent consolidation trends.
Keywords: mergers, concentration, multi-market participation, complementary demands
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