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Please use this identifier to cite or link to this item: http://hdl.handle.net/1974/6240

Title: An Empirical Study of the Causes and Consequences of Mergers in the Canadian Cable Television Industry

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Keywords: Cable television
Mergers and acquisitions
Price discrimination
Simulated Maximum Likelihood
Simulated Method of Moments
Economics of Scale
Issue Date: 2010
Series/Report no.: Canadian theses
Abstract: This dissertation consists of three essays that study mergers and consolidation in the Canadian cable television industry. The first essay provides a historical overview of regulatory and technical change in the industry, and presents the dataset that I constructed for this study. The basic pattern of interest in the data is regional consolidation, where dominant cable companies grow over time by acquiring the cablesystems of small cable operators. I perform a reduced-form empirical analysis that formally studies the determinants of mergers, and the effect that acquisitions have on cable bundles offered to consumers. The remaining essays develop and estimate structural econometric models to further study the determinants and welfare consequences of mergers in the industry. The second essay estimates an empirical analogue of the Farrell and Scotchmer (1988) coalition- formation game. I use the estimated model to measure the equilibrium impact that economies of scale and agglomeration has on firms’ acquisition incentives. I also study the impact entry and merger subsidies have on consolidation and long-run market structure. The final chapter estimates a variant of the Rochet and Stole (2002) model of multi-product monopoly with endogenous quality and prices. Using the estimated model I compute the impact mergers have on welfare. I find that both consumer and producer surplus rise with acquisitions. I also show that accounting for changes both in prices and products (i.e., cable bundle quality) is important for measuring the welfare impact of mergers.
Description: Thesis (Ph.D, Economics) -- Queen's University, 2010-12-09 14:39:15.431
URI: http://hdl.handle.net/1974/6240
Appears in Collections:Queen's Graduate Theses and Dissertations
Department of Economics Graduate Theses

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