Competition, cascades and connectivity: a multi-market model of endogenous mergers
Competition, cascades and connectivity: a multi-market model of endogenous mergers
There is an increasing trend towards global financial consolidation. Empirical evidence has shown that though consolidation can promote market efficiency, it can also increase systemic risk. Therefore, understanding the effects of company mergers on the financial markets is an increasingly pertinent issue.
This paper presents a multi-market agent-based model of endogenous merger formation, consistent with empirical analyses of UK merger data. The conditions under which market competition is sufficiently disrupted to prompt endogenously-created merger waves are identified. It is also shown how dependencies between markets can cause destabilising effects to propagate throughout the entire multi-market world.
Zedan, Camillia
eb32da6f-af4d-46e2-aa36-beec120044da
Zedan, Camillia
eb32da6f-af4d-46e2-aa36-beec120044da
Zedan, Camillia
(2012)
Competition, cascades and connectivity: a multi-market model of endogenous mergers.
CEF 2012: 18th Annual Conference on Computers in Economics and Finance, Prague, Czech Republic.
27 - 29 Jun 2012.
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Conference or Workshop Item
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Abstract
There is an increasing trend towards global financial consolidation. Empirical evidence has shown that though consolidation can promote market efficiency, it can also increase systemic risk. Therefore, understanding the effects of company mergers on the financial markets is an increasingly pertinent issue.
This paper presents a multi-market agent-based model of endogenous merger formation, consistent with empirical analyses of UK merger data. The conditions under which market competition is sufficiently disrupted to prompt endogenously-created merger waves are identified. It is also shown how dependencies between markets can cause destabilising effects to propagate throughout the entire multi-market world.
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Competition,_Cascades_and_Connectivity.pdf
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e-pub ahead of print date: 15 March 2012
Venue - Dates:
CEF 2012: 18th Annual Conference on Computers in Economics and Finance, Prague, Czech Republic, 2012-06-27 - 2012-06-29
Organisations:
Agents, Interactions & Complexity
Identifiers
Local EPrints ID: 340698
URI: http://eprints.soton.ac.uk/id/eprint/340698
PURE UUID: 7960071b-637f-4feb-8adc-4caeb4cc7dc7
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Date deposited: 03 Jul 2012 12:56
Last modified: 14 Mar 2024 11:28
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Author:
Camillia Zedan
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