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.
KeywordsAntitrust Bidding games Coalition formation games Collusion Concentration Cournot model Endogenous mergers Exogenous mergers Horizontal mergers Market power Mergers Monopolization Oligopoly Vertical mergers
- Nocke, V. 2000. Monopolisation and industry structure. Economics Working Paper No. 2000-W27, Nuffield College, Oxford.Google Scholar
- Nocke, V., and L. White. 2003. Do vertical mergers facilitate upstream collusion? Working Paper No. 03-033, PIER, University of Pennsylvania.Google Scholar
- Pesendorfer, M. 2005. Mergers under entry. RAND Journal of Economics 36: 661–679.Google Scholar
- Rey, P., and J. Tirole. 2005. A primer on foreclosure. In Handbook of industrial organization, ed. M. Armstrong and R. Porter, Vol. 3. Amsterdam: North-Holland.Google Scholar
- Stigler, G.J. 1950. Monopoly and oligopoly by merger. American Economic Review, Papers and Proceedings 40: 23–34.Google Scholar