Mergers and partial ownership
Working paper
Permanent lenke
http://hdl.handle.net/11250/164001Utgivelsesdato
2010-12Metadata
Vis full innførselSamlinger
- Discussion papers (FOR) [575]
Sammendrag
In this paper we compare the profitability of a merger between two
firms (one firm fully acquires another) and the profitability of a partial ownership
arrangement between the same two firms in which the acquiring firm obtains corporate control over the pricing decisions of the acquired firm. We find that joint profit
can be higher in the latter case because it may result in a greater dampening of
competition with respect to an outside competitor. We also derive comparative statics on the prices of the acquiring firm, the acquired firm, and the outside firm and
use them to explain puzzling features of the pay-TV markets in Norway and Sweden.
Utgiver
Norwegian School of Economics and Business Administration. Department of Finance and Management ScienceSerie
Discussion paper2010:15