Atlantic Economic Journal

, Volume 29, Issue 4, pp 378–392 | Cite as

Mergers, welfare, and concentration: Results from a model of stackelberg-cournot oligopoly

  • Nick Feltovich


This paper explores the relationship between mergers, welfare, and concentration, using a two-stage oligopoly model that generalizes the Cournot and Stackelberg models. This model has been used to show that some profitable mergers raise welfare and that some welfare-lowering mergers are unprofitable. Based on this, one might conclude that policy designed to restrict mergers is unnecessary or even counterproductive. This present paper examines in greater detail the implications of this model and finds that a merger's effects depend not only on the reduction in the number of firms, but also on premerger and postmerger firm behavior. In fact, most mergers lower welfare, and many of these are profitable. Usually, but not always, changes in concentration and welfare are negatively related.


International Economic Public Finance Firm Behavior Lower Welfare Oligopoly Model 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© International Atlantic Economic Society 2001

Authors and Affiliations

  • Nick Feltovich
    • 1
  1. 1.University of HoustonU.S.A.

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