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Published in:
2019 | OriginalPaper | Chapter
9. Waves
Author : Li Way Lee
Published in: Industrial Organization
Publisher: Springer International Publishing
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Abstract
Mergers tend to come in waves. A wave begins with one merger, which triggers a few other mergers, which trigger still more other mergers. I illustrate how mergers and acquisitions in a market can spread like a wild fire. I also comment on the good, the bad, and the ugly that are left in the wake of a merger wave. All these implications are derived from the assumption that managers pursue dominance, rather than someone else’s interest such as profit or stock price. It is surprising how far-reaching the implications are.