Abstract
We study sequential mergers under incomplete information where the follower is ignorant about the leader's merger synergy. When the follower's own synergy is sufficiently large, incomplete information induces both firms to merge more. These additional mergers benefit both firms and total welfare but hurt consumers. If the follower's synergy is very small, the leader is unable to take any strategic action, and most results are reversed. The analysis suggests that incomplete information strengthens the strategic complementarity between the two mergers and thereby increases the likelihood of a merger wave. © 2023 Wiley Periodicals LLC.
| Original language | English |
|---|---|
| Pages (from-to) | 131-154 |
| Journal | Journal of Economics & Management Strategy |
| Volume | 33 |
| Issue number | 1 |
| Online published | 14 Jun 2023 |
| DOIs | |
| Publication status | Published - 2024 |
| Externally published | Yes |
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