Horizontal mergers with free entry

摘要: Abstract We consider the impact of horizontal mergers in presence free entry and exit. In contrast to much previous literature on mergers, our model yields predictions that seem intuitively reasonable: with only moderate cost synergies a small number industry participants are beneficial (even under quantity competition), there is no “free rider problem” insiders always benefit more than outsiders, quantity-setting price-setting games yield similar about profitability. also derive two welfare results hold competition homogeneous goods: If initial, no-merger equilibrium symmetric, then entry, (1) merger has price (2) all privately socially beneficial.