Mergers of producers of perfect complements competing in price

Abstract

The endogenous merger model of Kamien and Zang (QJE, 1990) is generalized to price competition with perfect complements and used to show that some socially desirable mergers will fail to occur. We also clarify the link between this merger model and the 'exogenous merger' literature. Correspondence to: Gerard Gaudet, Departement des sciences Cconomiques. Universite du Quebec i Montreal. C.P. 8888 Succursale A, Montreal. Quebec, Canada H3C 3P8.' Their so-called decenrrulized gcme is actually a three-stage game. We restrict our attention here to their centroked gnmc.which reduces to a two-stage game. 01651765/92/$05.00 D 1992 -Elsevier Science Publishers B.V. All rights reserved

Endogenous horizontal mergers under cost uncertainty

“…For mergers under Bertrand competition, see Deneckere and Davidson (1985). 3 Kamien and Zang's (1990) basic model has been applied to other situations: increasing marginal costs (Kamien and Zang, 1991), sequential bidding (Kamien and Zang, 1993), price competition with perfect complements (Gaudet and Salant, 1992a), savings of fixed costs (Gaudet and Salant, 1992b), and delegation (Gonzalez-Maestre and Lopez-Cunat, 2001). 4 "[E]xcluding fixed costs, the only mergers that will occur endogenously will be mergers to monopoly."…”

Endogenous Mergers of Complements with Mixed Bundling

“…Kamien and Zang (1990) first formulated a two-stage game where the merger decision is endogenized prior to quantity competition. With perfect complements and price competition, Gaudet and Salant (1992) generalize their model to establish that some socially desirable mergers may fail to occur. Economides and Salop (1992) introduce competition across systems that are composed of compatible complementary products, and provide an extensive analysis of the effects on prices of alternative (exogenously given) market structures.…”

Research on a Triopoly Dynamic Game with Free Market and Bundling Market in the Chinese Telecom Industry

“…Chen and Wang [11] researched the pricing policies, subsidy policies, and channel selection policies of different power supply chain structures. In the perspective of the mergers producer, Gaudet and Salant [12] compared the profits of firms under different circumstances. Martin [13] studied the price pooling equilibrium under various conditions that firms produce strategic substitutes or strategic complements.…”