Browsing by Author "Marais, Wihan"

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    Simulated horizontal mergers in vertically related markets
    (Stellenbosch : Stellenbosch University, 2022-04) Marais, Wihan; Boshoff, Willem; Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH SUMMARY: A global trend of increasing retail concentration and a heightened concern about buyer power demand more sophisticated and flexible merger screening tools. Parametrisable merger simulation models that suitably account for the effects of bargaining competition may pose a solution. Thus, this dissertation examines the predicted effects o f retail consolidation in a vertically related market using the merger simulation tool developed by Tschantz and Froeb (2019). With the flat logit nested demand function for differentiated products of Boshoff e t a l. (2020), the predicted retail merger effects of five different bargaining and non-bargaining models for a 1 × 2 industry are evaluated. The primary contribution of this study is its unique application of Nashin-Shapley (NiS) bargains in the study of retail consolidation. It is novel in so far it compares the inherent implications of Nash-in-Nash (NiN) and NiS bargains for the appraisal of retail mergers. Pre-merger competitive outcomes with NiN predetermine a finding o f an anticompetitive merger. Contrarily, predictions with NiS as its starting point do not indicate that a merger would cause consumer harm, and therefore, would not be prohibited. In addition, the results suggest that retail consolidation consistently poses a viable option through which retailers can improve their profitability and bargaining positions. However, merger incentives are moderated by the competitiveness of an outside market.