The effects of costly consumer search on mergers and cartels
PhD ceremony: Ms. V. Petrikaite, 12.45 uur, Academiegebouw, Broerstraat 5, Groningen
Dissertation: The effects of costly consumer search on mergers and cartels
Promotor(s): prof. J.L. Moraga-Gonzalez
Faculty: Economics and Business
Information is costly. Hence, a consumer may decide to learn the utilities of a few available alternatives instead of searching them all. The decision to be partially informed has an effect on market prices, quantities, and location decisions of firms. This thesis contributes to the stream of economics literature on costly consumer search by addressing incentives to merge and engage in collusion. We find that high search costs prevent horizontal integration if the joint price setting is the only change after a merger takes place. However, if the firms can reallocate their varieties and establish a multiproduct shop then merging is both profitable and welfare improving. The post-merger welfare improvement comes from significant savings on consumer search costs. The incentives to collude and to deviate from a cartel decrease if the search costs increase. However, we find that cartels are more likely to survive if the search costs increase.
Last modified: | 13 March 2020 01.03 a.m. |
More news
-
17 July 2024
Veni-grants for ten researchers
The Dutch Research Council (NWO) has awarded a Veni grant of up to €320,000 each to ten researchers of the University of Groningen and the UMCG. The Veni grants are designed for outstanding researchers who have recently gained a PhD.
-
08 July 2024
New collaboration between UGBS and Faculty of Spatial Sciences: education for professionals
Bringing together knowledge and experience will provide new educational opportunities for professionals working in a variety of organisations.
-
02 July 2024
Vocation or necessary evil?
It is important to know how employees perceive their jobs, as Milena Nikolova discovered. The Professor of Economics of Wellbeing distinguishes three different types of work motivations.