Mergers and (uncertain) Synergies in Oligopoly

Inhaltsverzeichnis (Table of Contents)

• Introduction
• Literature Review
• Industry Structure and it‘s Implications on Competition
• The Static approach of Industry Structure
• Monopoly
• Cournot Competition
• Bertrand Competition
• Horizontal Mergers and the Effects on Quantities and Prices
• The Effect of a Merger within Bertrand competition
• Incentives for a Merger within Bertrand competition
• Complementary Goods
• Incentives to join a Merger
• The Effect of a Merger within Cournot competition
• Incentives for Mergers within Stackelberg games - Solving the Merger Paradox
• Incentives for Mergers - Solving the Merger Paradox
• The Effect of a Merger within Cournot competition on Welfare
• Horizontal Mergers and Synergies
• Efficiency Gains
• Economies of Scale
• Economies of Scope
• A critical view towards Synergies
• Endogenous Mergers and Efficiency Gains
• Horizontal Mergers and uncertain Synergies
• Modeling Mergers and uncertain Synergies
• The Bayesian Equilibrium
• Merger with Uncertainty and the Impact of private Information
• The Effects of Uncertainty within Bertrand competition on Welfare

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This thesis aims to analyze the economic literature on merger formation, focusing on the effects of mergers within Cournot and Bertrand oligopoly models, including deterministic and uncertain scenarios. It seeks to understand the incentives for firms to merge, the consequences for market structure, and the impact on welfare.

• Profitability of mergers under different competitive structures
• The merger paradox and attempts to overcome its puzzling results
• The role of efficiency gains and synergies in merger formation
• The impact of uncertain cost savings and the informational advantage of merging firms
• The implications of uncertainty for antitrust policy and welfare

Zusammenfassung der Kapitel (Chapter Summaries)

The thesis begins by reviewing the theoretical frameworks of Cournot and Bertrand competition, highlighting the key differences in strategic behavior and market outcomes. It then explores the effects of mergers on quantities and prices, analyzing the incentives for mergers in both Bertrand and Cournot settings. The merger paradox, which suggests that mergers are generally unprofitable in Cournot competition, is discussed, and various solutions are presented. Chapter 4 focuses on efficiency gains and synergies, examining the role of economies of scale and scope in merger formation and the debate surrounding the definition of synergy. Finally, Chapter 5 explores the impact of uncertainty on merger outcomes, examining models that incorporate private information and uncertain cost savings.

Schlüsselwörter (Keywords)

The thesis focuses on horizontal mergers, oligopoly, Cournot competition, Bertrand competition, merger paradox, efficiency gains, synergies, economies of scale, economies of scope, uncertain efficiency gains, private information, Bayesian equilibrium, and antitrust policy.