The merger paradox and why aspiration levels let it fail in the laboratory

• 成果类型: Article
• 署名作者: Huck, Steffen; Konrad, Kai A.; Mueller, Wieland; Normann, Hans-Theo
• 署名单位: University of London; University College London; Free University of Berlin; Free University of Berlin; Tilburg University; University of London; Royal Holloway University London
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2007.02067.x
• 发表日期: 2007
• 页码: 1073-1095
• 关键词: horizontal mergers; market power; COMPETITION; DECISION; INFORMATION; MODEL; specification; ORGANIZATION; COOPERATION; performance

摘要

We study the merger paradox, a relative of Harsanyi's bargaining paradox, in an experiment. We examine bilateral mergers in experimental Cournot markets with initially three or four firms. Standard Cournot-Nash equilibrium predicts total outputs well. However, merged firms produce significantly more output than their competitors. As a result, mergers are not unprofitable. By analysing control treatments, we provide an explanation for these results based on the notion of aspiration levels, and show that the same logic also operates when a new firm enters a market. These results have some general consequences for adaptive play in changing environments.