Paper #960

Title:

Spatial market expansion through mergers

Authors:

Verónica Durán-Carbó, Charles ReVelle and Daniel Serra

Date:

March 2006

Abstract:

In this paper we present a model that studies firm mergers in a spatial setting. A new model is formulated that addresses the issue of finding the number of branches that have to be eliminated by a firm after merging with another one, in order to maximize profits. The model is then applied to an example of bank mergers in the city of Barcelona. Finally, a variant of the formulation that introduces competition is presented together with some conclusions.

Keywords:

Mergers, facility location, spatial competition

JEL codes:

C61, J80

Area of Research:

Operations Management

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