David Spector
"Horizontal mergers, entry, and efficiency defenses"
JEL codes:

Abstract: In standard models of Cournot competition, it is well-known that if large-scale entry is impossible, then any merger failing to create technological synergies must harm consumers through a higher price level (Farrell and Shapiro, 1990). This paper shows that this is true irrespective of entry conditions: any profitable Cournot merger failing to generate synergies must raise price, even if large-scale entry is possible or if the merger allows the avoidance of fixed cost duplication.

Pre-publication pdf copy.