Endogenous merger formation in asymmetric markets: a reformulation and welfare analysis

摘要: This paper analyzes endogenous merger formation in oligopolistic markets where firms have different unit production costs. We reformulate the model, introduced by Barros (1998), employing core as cooperative equilibrium concept. show that, depending on size asymmetry pre-merger market, this alternative solution concept predicts a post-merger market structure. For intermediate differences, it is not most efficient firm that generally involved but least firm. Additionally, we present welfare analysis which shows under wide range of asymmetries, has improving net effect.