By assuming asymmetric product differentiation, we consider the “merger paradox” in price competition (or the incentive to collude in prices). We investigate whether the emergence of the merger paradox depends on the degree of product differentiation between firms. In particular, unlike Deneckere and Davidson (1985), we demonstrate that if the degree of product differentiation between the insider and outsider is sufficiently small, then they are strategic substitutes, and thus, the merger paradox arises in price competition.

中文翻译：

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产品差异不对称下的价格竞争中的“合并悖论”

通过假设产品差异不对称，我们考虑了价格竞争中的“合并悖论”（或价格合谋的动机）。我们调查并购悖论的出现是否取决于公司之间产品差异化的程度。特别是，与Deneckere和Davidson（1985）不同，我们证明，如果内部人员和外部人员之间的产品差异程度足够小，则它们是战略替代品，因此，在价格竞争中会出现合并悖论。