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Merger and Entry With Learning

Yves Guéron & Jihong Lee

The Journal of Industrial Economics2025https://doi.org/10.1111/joie.12407article
AJG 3ABDC A*
Weight
0.37

Abstract

We study dynamic market competition between a monopoly incumbent and an entrant experimenting with disruptive innovation. The incumbent can pursue the uncertain innovation after acquiring the disruptor, who may be more productive and privately know its ability. Mergers generate synergies. We characterize perfect equilibria in Markov strategies on bargaining and R&D. The equilibrium path is determined by the interaction between market belief in the unobservable state and the distribution of private information. Asymmetric information generates failed mergers and buyout effects. Inefficient mergers arise from imperfect returns to R&D. There may be under‐ or over‐investment. We provide implications for antitrust policy.

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https://doi.org/https://doi.org/10.1111/joie.12407

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@article{yves2025,
  title        = {{Merger and Entry With Learning}},
  author       = {Yves Guéron & Jihong Lee},
  journal      = {The Journal of Industrial Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1111/joie.12407},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.