Entry and mergers in oligopoly with firm-specific network effects

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dc.coverageDOI: 10.1007/s00199-020-01316-7
dc.creatorGama, Adriana
dc.creatorLahmandi-Ayed, Rim
dc.creatorPereira, Ana Elisa
dc.date2020
dc.date.accessioned2026-01-05T21:02:48Z
dc.date.available2026-01-05T21:02:48Z
dc.descriptionThis paper investigates the effects of exogenous entry on market performance, and the profitability and welfare effects of horizontal mergers in symmetric Cournot oligopolies with firm-specific network effects. With strategic substitutes in the Cournot part of the model, per-firm output is declining in the number of firms, but industry output, price, per-firm profit, consumer surplus and social welfare may go either way in response to entry. We identify respective sufficient conditions for each possibility. The counter-intuitive conclusions tend to require strong network effects. We study the scope for profitability of mergers and the associated welfare effects. In a general analysis, we provide a sufficient condition on inverse demand for a merger to be profitable, which amounts to requiring strong network effects. Under the condition that leads to higher industry output with entry, mergers are always social welfare-enhancing.eng
dc.identifierhttps://investigadores.uandes.cl/en/publications/2132c79c-79c4-4747-8409-45df538daa0e
dc.identifier.urihttps://repositorio.uandes.cl/handle/uandes/60679
dc.languageeng
dc.rightsinfo:eu-repo/semantics/restrictedAccess
dc.sourcevol.70 (2020) date: 2020-11-01 nr.4 p.1139-1164
dc.subjectDemand-side economies of scale
dc.subjectIncompatibility
dc.subjectMergers
dc.subjectNetwork effects
dc.subjectNetwork industries
dc.subjectDemand-side economies of scale
dc.subjectIncompatibility
dc.subjectMergers
dc.subjectNetwork effects
dc.subjectNetwork industries
dc.titleEntry and mergers in oligopoly with firm-specific network effectseng
dc.typeArticleeng
dc.typeArtículospa
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