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Article: Sequential mergers under incomplete information

TitleSequential mergers under incomplete information
Authors
Cong, JiajiaZhou, Wen
Issue Date14-Jun-2023
PublisherWiley
Citation
Journal of Economics & Management Strategy, 2023, v. 33, n. 1, p. 131-154 How to Cite?
DOI: http://dx.doi.org/10.1111/jems.12549
Abstract

We study sequential mergers under incomplete information where the follower is ignorant about the leader's merger synergy. When the follower's own synergy is sufficiently large, incomplete information induces both firms to merge more. These additional mergers benefit both firms and total welfare but hurt consumers. If the follower's synergy is very small, the leader is unable to take any strategic action, and most results are reversed. The analysis suggests that incomplete information strengthens the strategic complementarity between the two mergers and thereby increases the likelihood of a merger wave.


Persistent Identifierhttp://hdl.handle.net/10722/337009
ISSN
1058-6407
2023 Impact Factor: 1.2
2023 SCImago Journal Rankings: 0.961
ISI Accession Number ID
WOS:001006436800001

 

DC FieldValueLanguage
dc.contributor.authorCong, Jiajia-
dc.contributor.authorZhou, Wen-
dc.date.accessioned2024-03-11T10:17:20Z-
dc.date.available2024-03-11T10:17:20Z-
dc.date.issued2023-06-14-
dc.identifier.citationJournal of Economics & Management Strategy, 2023, v. 33, n. 1, p. 131-154-
dc.identifier.issn1058-6407-
dc.identifier.urihttp://hdl.handle.net/10722/337009-
dc.description.abstract<p>We study sequential mergers under incomplete information where the follower is ignorant about the leader's merger synergy. When the follower's own synergy is sufficiently large, incomplete information induces both firms to merge more. These additional mergers benefit both firms and total welfare but hurt consumers. If the follower's synergy is very small, the leader is unable to take any strategic action, and most results are reversed. The analysis suggests that incomplete information strengthens the strategic complementarity between the two mergers and thereby increases the likelihood of a merger wave.<br></p>-
dc.languageeng-
dc.publisherWiley-
dc.relation.ispartofJournal of Economics & Management Strategy-
dc.titleSequential mergers under incomplete information-
dc.typeArticle-
dc.identifier.doi10.1111/jems.12549-
dc.identifier.scopuseid_2-s2.0-85161815217-
dc.identifier.volume33-
dc.identifier.issue1-
dc.identifier.spage131-
dc.identifier.epage154-
dc.identifier.eissn1530-9134-
dc.identifier.isiWOS:001006436800001-
dc.identifier.issnl1058-6407-

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