Abstract
The term ‘endogenous mergers’ reflects the view in economic theory that mergers are equilibrium outcomes. The literature on endogenous mergers explicitly analyses firms’ incentives to merge and makes predictions on the volume and type of mergers that are likely to occur. In this literature, merger formation is modelled as a bidding game or non-cooperative coalition formation game (Kamien and Zang 1990; Gowrisankaran 1999; Nocke 2000; Pesendorfer 2005), or as an anonymous merger market where firms can buy or sell corporate assets (Jovanovic and Rousseau 2002; Nocke and Yeaple 2007). The literature on endogenous mergers is conceptually distinct from the literature on exogenous mergers, which considers the positive and normative effects of a merger between a given (‘exogenous’) set of firms.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Nocke, V. (2008). Mergers, Endogenous. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_2543-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_2543-1
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Publisher Name: Palgrave Macmillan, London
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