The Coordinated Effect Of A Horizontal Merger

Telecommunication industry occupies a special position in china. Its healthy development can impact the participants and the public.It also play an important role in promoting the growth of national economy in China.So the experts and scholars who come from all countries,the government and the public focus on the reform of the telecommunication industry.China began to reform the telecommunication industry thirty years ago.But different pepole have a different opinion on these reforms.In 2008, China telecommunication industry began to be reformed again.It is the third restructuring.After this reform,six companies were horizontal merged into three.Whether this reform is good for competition among companies?This thesis evaluated the coordinated effect of this restructuring,and answer the question.Presently,the main methods currently used by scholars in the world to evaluate the coordination effect of a merger is the traditional way that a check list of elements–as originally listed by Stigler–considered relevant to the probability of collusion.When they analyse a case,they are not use models usually.This thesis chosed the BTE model to evaluate the coordinated effect of the third restructuring of China telecommunication industry in 2008.BTE is Friedman's notion of"balanced temptations",which refers to a model characterized by a unique collusive equilibrium and by only one parameter-the common critical discount factor-which can measure the stability of a cartel.Through computation,I find that the critical discount factor of collusion became smaller.Therefore this reform is not good for competition.Besides,this paper also gives some suggestions about the reform.