Profitable mergers with endogenous tariffs

Pedro Mendi*, Róbert Veszteg

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


In this note, we suggest a link between tariff protection and firms' incentives to engage in a horizontal merger. We consider a Cournot oligopoly with equal, constant marginal costs where firms have to decide on lobbying efforts prior to choosing output. These lobbying efforts will determine whether a prohibitive tariff is introduced. We find that the possibility of lobbying may enlarge the set of mergers that are profitable, even without cost reductions.

Original languageEnglish
JournalEconomics Bulletin
Issue number22
Publication statusPublished - 2007 Sept 25
Externally publishedYes

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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