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dc.contributor.authorDarai, D.
dc.contributor.authorRoux, C.
dc.contributor.authorSchneider, F.
dc.date.accessioned2019-12-02T12:20:25Z
dc.date.available2019-12-02T12:20:25Z
dc.date.issued2019-09-17
dc.identifier.otherCWPE1984
dc.identifier.urihttps://www.repository.cam.ac.uk/handle/1810/299469
dc.description.abstractWe study whether firms’ collusive ability influences their incentives to merge: when tacit collusion is unsuccessful, firms may merge to reduce competitive pressure. We run a series of Bertrand oligopoly experiments where the participants decide whether, when, and to whom they send merger bids. Our experimental design allows us to observe (i) when and to whom mergers are proposed, (ii) when and by whom merger offers are accepted, and (iii) the effect on prices when mergers occur in this way. Our findings suggest that firms send more merger offers when prices are closer to marginal costs. Maverick firms that cut prices and thereby fuel competition are the predominant (but reluctant) receivers of these offers.
dc.publisherFaculty of Economics, University of Cambridge
dc.relation.ispartofseriesCambridge Working Papers in Economics
dc.rightsAll Rights Reserved
dc.rights.urihttp://www.rioxx.net/licenses/all-rights-reserved/
dc.subjectTacit collusion
dc.subjectMavericks
dc.subjectBertrand oligopoly
dc.subjectExperiments
dc.titleMergers, Mavericks, and Tacit Collusion
dc.typeWorking Paper
dc.identifier.doi10.17863/CAM.46540


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