Takeover waves

• Autores: Ramon Faulí Oller
• Localización: Working papers = Documentos de trabajo: Serie AD, Nº. 30, 1999
• Idioma: inglés
• Enlaces
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• Resumen

  • Horizontal takeovers often occur in waves. A sequence of takeovers is obtained in a Cournot setting with cost asymmetries. They are motivated by two different reasons: (i) A low realization of demand increases the profitability of takeovers. (ii) Takeovers raise the profitability of future takeovers. A possible explanantion of merger races is also obtained by showing that firms buying in the first place pay a lower price for their targets.