Pastor-Gosálbez, M.T and R. Fauli-Oller
Revista de Economía Aplicada – 72 (vol. XXIV), (2016), 47-56
Abstract: We analyze merger policy in an industry where firms participate in a non-tournament R&D competition. We conclude that merger policy should be, in general, less restrictive in high technology markets (pharmaceuticals and telecoms), because mergers reduce the wasteful duplication of R&D expenditures. However, merger policy should become more strict in (very) asymmetric market structures. In this case, competition provides incentives for R&D, but, at the same time, duplication is avoided.