Spanish Economic Review

, Volume 10, Issue 4, pp 279–288

Mergers in asymmetric Stackelberg markets


    • Escuela de EconomíaUniversidad de Guanajuato
  • Ramon Faulí-Oller
    • Economics DepartmentUniversidad de Alicante
Regular Article

DOI: 10.1007/s10108-007-9038-y

Cite this article as:
Escrihuela-Villar, M. & Faulí-Oller, R. Span Econ Rev (2008) 10: 279. doi:10.1007/s10108-007-9038-y


It is well known that the profitability of horizontal mergers with quantity competition is scarce. However, in an asymmetric Stackelberg market we obtain that some mergers are profitable. Our main result is that mergers among followers become profitable when the followers are inefficient enough. In this case, leaders reduce their output when followers merge and this reduction renders the merger profitable. This merger increases price and welfare is reduced.



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© Springer-Verlag 2007