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on Industrial Organization |
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Issue of 2006‒02‒26
four papers chosen by |
| By: | Suetens S.; Potters J. |
| Abstract: | On the basis of evidence of past oligopoly experiments, we argue that there is often significantly more tacit collusion in Bertrand price-choice than in Cournot quantity-choice markets. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ant:wpaper:2005037&r=ind |
| By: | Martynova,Martina; Renneboog,Luc (Tilburg University, Center for Economic Research) |
| Abstract: | This paper provides a comprehensive overview of the European takeover market. We characterize the main features of the domestic and cross-border corporate takeovers involving European companies in the period 1993-2001. We provide detailed and comparable information on the size and dynamics of takeover activity in 28 Continental European countries, the UK and Ireland. The data is supplemented with the characteristics of takeover transactions, including the type of takeovers (negotiated acquisition or tender offer), bid attitude (friendly or hostile), payment method (all-cash, all-equity, or mixed deals), legal status of the target firm (public or private), takeover strategy (focus or diversification), amongst other factors. In addition, we investigate the shortterm wealth effects of 2,419 European mergers and acquisitions. We find announcement effects of 9% for target firms compared to a statistically significant announcement effect of only 0.5% for the bidders. Including the price run-up, the share price reaction amounts to 21% for the targets and 0.9% for the bidders. We show that the estimated shareholder wealth effect strongly depends on the different attributes of the takeovers. The type of takeover bid has a large impact on the short-term wealth effects for the target firm shareholders with hostile takeovers triggering substantially larger price reactions than friendly transactions. When a UK target is involved, the abnormal returns are higher than those of bids involving a Continental European target. There is strong evidence that the means of payment has a large impact on the share prices of both bidder and target. |
| Keywords: | takeovers;mergers and acquisitions;diversification;takeover waves;means of payment |
| JEL: | G34 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:20066&r=ind |
| By: | Paul H. Jensen (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Elizabeth Webster (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne) |
| Abstract: | This paper examines the effects of market power and product differentiation on demand for grocery products in Australia over the period 2002 to 2005. We construct a model of the relationship between demand, market power and brand characteristics and then estimate the model using monthly data on price, quantity and volume sold for a bundle of 92 brands in 12 product categories from major supermarket stores across Australia. We also use data on the characteristics of each brand such as whether the product is environment-friendly, is a “private label”, or is made from recyclable materials. Our results suggest that firms are able to affect their demand curves through both product differentiation strategies and through market power. |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:iae:iaewps:wp2006n05&r=ind |
| By: | Clarke, Roger (Cardiff Business School); Collie, David R. (Cardiff Business School) |
| Abstract: | This article analyses export taxes in a Bertrand duopoly with product differentiation, where a home and a foreign firm both export to a third-country market. It is shown that the maximum-revenue export tax always exceeds the optimum-welfare export tax. In a Nash equilibrium in export taxes, the country with the low cost firm imposes the largest export tax. The results under Bertrand duopoly are compared with those under Cournot duopoly. It is shown that the absolute value of the export subsidy or tax under Cournot duopoly exceeds the export tax under Bertrand duopoly. |
| Keywords: | Trade Policy; Imperfect Competition; Oligopoly |
| JEL: | F12 F13 L13 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:cdf:wpaper:2006/15&r=ind |