| Summary: | 碩士 === 國立臺北大學 === 經濟學系 === 98 === Horizontal mergers are very common in reality. However, there are big differences in merger decision-making. Some post-merger entities still product two types of goods, but others only produce one product. What incentives led post-merger entities to make different decisions? In addition, suppose firms produce different qualities of one goods. Is there any difference in quality of goods between pre-merger and post-merger? Do firms consider the gap in quality when firms look for merger target?
Our study mainly applies the vertical product differentiation model by Motta (1993) to confer horizontal merger with vertical product differentiation. With two kinds of cost structures, we discuss two firms and three firms in the market, and have three important conclusions. First, the post-merger entity has incentive to provide product in one quality, if the cost structure exists economies of scale. Second, the product quality of the firm which doesn’t merger has great influence on the product quality of the post-merger entity. Last, the merger target will affect the product quality of the post-merger entity.
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