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Horizontal Mergers With Capital Adjustment: Workers' Cooperatives and the Merger Paradox

Year: 2016

Type: article

Abstract: ABSTRACT We study the incentives towards horizontal merger among firms when the amount of capital is the strategic variable. We focus on workers' cooperatives, but our conclusions apply also to employment‐constrained profit maximizers. Within a simple oligopoly model, we prove that the horizontal merger, for any merger size, is: (i) privately efficient for insiders as well as for outsiders; (ii) socially efficient if market size is large enough, even in the case of merger to monopoly.

Source: Annals of Public and Cooperative Economics

DOI: 10.1111/apce.12125

Authors: Flavio DELBONO, Luca LAMBERTINI

Institution: University of Bologna

Language: English

Topic: Merger and Competition Analysis

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W2541111700

FWCI: 1.281

Cites: 15

Cited by: 4

Related to: 10