Mergers Under Entry
Volume: Volume 36, No. 3
Issue: Autumn 2005
Pages: 661-679
Authors: Martin Pesendorfer
Title: Mergers Under Entry
Abstract: I study merger incentives in a dynamic model under the presence of gradual entry. I consider a repeated game with merger decisions in every period and characterize the set of equilibria. I establish two properties: (i) a merger for monopoly may not be profitable; (ii) a merger in a nonconcentrated industry can be profitable. I illustrate the merger welfare implications in the Cournot model.