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Efficient horizontal mergers. (English) Zbl 0910.90014

Summary: This paper considers the Debreu-Farrell-Färe measure of efficiency of merger to compare economic efficiencies of alternative merged entities in a homogeneous good industry. The comparability results rely on concentration curve dominance relation and identify the class of cost functions for which efficiency ranking of the entities becomes unambiguous, The results have been developed under alternative assumptions about the total output and number of firms of the merging subgroups.

MSC:

91B38 Production theory, theory of the firm
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