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Consider an oligopoly market of n firms. If the firms have been merged into a monopolist, then the market must have a non-empty core (otherwise, the final allocation of monopoly profits would have been rejected by at least one blocking coalition). In general, the core of any observed merger must be non-empty. This paper provides two core-existence results:(More)
This paper extends Farrell and Shapiro (1990) and Levin (1990) by providing necessary and sufficient conditions for horizontal mergers to be both profitable and welfare-enhancing when market demand and firms' costs are linear. We show that profitable, welfare-enhancing mergers are likely to involve firms whose combined pre-merger market shares exceed 50%,(More)
This paper extends Farrell and Shapiro (1990) and Levin (1990) by providing necessary and sufficient conditions for horizontal mergers to be both profitable and welfare-enhancing when market demand and firms' costs are linear. We show that profitable, welfare-enhancing mergers are likely to involve firms whose combined pre-merger market shares exceed 50%,(More)
More economists are interested in analyzing situations in which cooperative behavior within a coalition coexists with strategic behavior across the coalitions. The underlying equilibrium is defined as the hybrid solution with a distribution rule (HSDR), which could contribute to these studies to the same extent that Nash equilibrium does to strategic(More)
Since the seminal work of Olson and Zeckhauser (1966), the military alliance literature has centered on testing the hypothesis that small alliance members will free ride on the protection of large alliance members. This has been tested using cross-section time-series models and static simultaneous equation models. In contrast, we use vector autoregression(More)