Asymmetric Information, Bargaining, and International Mergers | Zendy

Das Satya P. | Zendy; Sengupta Sarbajit | Zendy

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Asymmetric Information, Bargaining, and International Mergers

Author(s) -

Das Satya P.,

Sengupta Sarbajit

Publication year - 2001

Publication title -

journal of economics and management strategy

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.672

H-Index - 68

eISSN - 1530-9134

pISSN - 1058-6407

DOI - 10.1111/j.1430-9134.2001.00565.x

Subject(s) - subsidy , private information retrieval , information asymmetry , welfare , microeconomics , business , industrial organization , economics , monetary economics , market economy , statistics , mathematics

The formation of international mergers is examined in the presence of two kinds of asymmetric information, one when a local firm has private information on market size and the other when a foreign firm has private information on its technology. In each situation, parametric configurations are identified under which a merger offer may or may not be made. It also examines the kind of offer and the probability of its acceptance. The likelihood of a merger beingformed is also related to the basic market size, demand uncertainty, and cost uncertainty. Welfare effects of tax/subsidy policies by the host country are also analyzed.

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