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Takayuki Watanabe and Nobuo Matsubayashi
''Note on Stable Mergers in a Market with Asymmetric Substitutability''
( 2013, Vol. 33 No.3 )
This paper studies the stability of mergers between firms in a Cournot market. Unlike most existing works, we consider a demand structure where the substitutability between firms is asymmetric. We specifically focus on the stability of the grand coalition by analyzing the core allocation. The main result of our analysis shows that the grand coalition becomes stable, as the market is more asymmetric in terms of substitutability.
Keywords: Core, Horizontal merger, Cournot oligopoly, Differentiation, Grand coalition
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Mar 18 2013 Manuscript Accepted : Aug 09 2013

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