Horizontal mergers and innovation in concentrated industries

  title={Horizontal mergers and innovation in concentrated industries},
  author={Brett Hollenbeck},
  journal={Quantitative Marketing and Economics},
  • Brett Hollenbeck
  • Published 1 March 2020
  • Business
  • Quantitative Marketing and Economics
It is an open question in antitrust economics whether allowing dominant firms to acquire smaller rivals is ultimately helpful or harmful to the long run rate of innovation and therefore long-term consumer welfare. I develop a framework to study this question in a dynamic oligopoly model where firms endogenously engage in investment, entry, exit and mergers. Firms produce vertically differentiated goods, compete by innovating on product quality, and can acquire rival firms to gain market power… 
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