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Waves

  • Li Way Lee
Chapter

Abstract

Mergers tend to come in waves. A wave begins with one merger, which triggers a few other mergers, which trigger still more other mergers. I illustrate how mergers and acquisitions in a market can spread like a wild fire. I also comment on the good, the bad, and the ugly that are left in the wake of a merger wave. All these implications are derived from the assumption that managers pursue dominance, rather than someone else’s interest such as profit or stock price. It is surprising how far-reaching the implications are.

Keywords

Merger waves Small world 

References

  1. Gai, Prasanna, Andrew Haldane, and Sujit Kapadia. 2011. Complexity, Concentration, and Contagion. Journal of Monetary Economics 58 (5): 453–470.CrossRefGoogle Scholar
  2. Haldane, Andrew G., and Robert M. May. 2011. Systemic Risk in Banking Ecosystems. Nature 469 (20): 351–355.CrossRefGoogle Scholar
  3. Lee, Li Way. 2013. Merger Wave in a Small World: Two Views. The Journal of Socio-Economics 43 (Apr.): 68–71.CrossRefGoogle Scholar
  4. Watts, Duncan J. 1999. Small Worlds: The Dynamics of Networks Between Order and Randomness. Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Li Way Lee
    • 1
  1. 1.Department of EconomicsWayne State UniversityDetroitUSA

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