Horizontal mergers have a large impact by inducing a long-lasting
change in market structure. Only in an industry with substantial
entry barriers is a merger not immediately counteracted by post-merger entry. To evaluate the duration of the effects of a merger, I use the model of Abbring and Campbell (2010) to estimate demand thresholds for entry and for exit. These thresholds, along with the process for demand, are estimated using data from the ready-mix concrete industry. Simulations predict that a merger from duopoly to monopoly generates between 9 and 10 years of monopoly in the market.
"Mergers and Sunk Costs: An Application to the Ready-Mix Concrete Industry."
American Economic Journal: Microeconomics,
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Monopoly; Monopolization Strategies
Oligopoly and Other Imperfect Markets
Monopolization; Horizontal Anticompetitive Practices
Metals and Metal Products; Cement; Glass; Ceramics