Mergers and the perception of market power: The role of aspiration levels
نویسندگان
چکیده
In this paper, we study bilateral mergers in experimental Cournot markets with initially three or four firms. Theory predicts preand post-merger total output well. However, merged firms produce significantly more than firms without a merger history. As a result, mergers are not as unprofitable as predicted. By analyzing two control treatments, we provide an explanation for these results based on the notion of aspiration levels. The results have some general consequences for adaptive play in changing environments.
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تاریخ انتشار 2003