Horizontal Mergers in Multitier Decentralized Supply Chains

摘要: The well-known economic theory predicts that consumer price will fall after a horizontal merger when the amount of marginal cost reduction from operating synergies exceeds premerger markup merging firm. However, occurs in multitier decentralized supply chain where finite number firms compete at each tier, we show this result holds only tier acts as leader chain. In chain, any other decrease certain threshold is larger than markup. Moreover, increasing gets longer and can be substantially When accounting for subsequent entry long-run equilibrium, contrary to common belief, synergy does not necessarily benefit consumers more. This paper was accepted by Yossiv Aviv, operations management.