Competition and Mergers among Nonprofits

Research output: Working paperDiscussion paperOther research output

219 Downloads (Pure)

Abstract

Should mergers among nonprofit organizations be regulated differently than mergers among for-profit firms? The relevant empirical literature is highly controversial, the theoretical literature is scarce. I analyze the question by modeling duopoly competition with quality-differentiated goods. I compare welfare effects of mergers between firms with the effects of mergers between nonprofits dominated by consumers, workers, suppliers, and pure donors respectively. I find that mergers both among firms and among most types of nonprofits do not increase welfare. Mergers among consumerdominated nonprofits, however, can improve welfare. These results imply for competition law and regulation that “nonprofit” might be too crude a label for organizations with varying goals. Consequently, mergers among certain nonprofit organizations should not necessarily be treated in the same way as mergers among for-profit firms – a notion that is absent in current merger guidelines both in the US and the EU.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages44
Volume2007-82
Publication statusPublished - 2007

Publication series

NameCentER Discussion Paper
Volume2007-82

Fingerprint

Mergers
Nonprofit organization
Merger guidelines
Welfare effects
Competition law
Workers
Duopoly
Modeling
Suppliers

Keywords

  • Nonprofits
  • Mergers
  • Antitrust
  • Governance
  • Owner Objectives
  • Notfor- profit Sector
  • Organizational Choice

Cite this

Prüfer, J. (2007). Competition and Mergers among Nonprofits. (CentER Discussion Paper; Vol. 2007-82). Tilburg: Microeconomics.
Prüfer, J. / Competition and Mergers among Nonprofits. Tilburg : Microeconomics, 2007. (CentER Discussion Paper).
@techreport{5f3260ab659d46008eaa1286afeadb67,
title = "Competition and Mergers among Nonprofits",
abstract = "Should mergers among nonprofit organizations be regulated differently than mergers among for-profit firms? The relevant empirical literature is highly controversial, the theoretical literature is scarce. I analyze the question by modeling duopoly competition with quality-differentiated goods. I compare welfare effects of mergers between firms with the effects of mergers between nonprofits dominated by consumers, workers, suppliers, and pure donors respectively. I find that mergers both among firms and among most types of nonprofits do not increase welfare. Mergers among consumerdominated nonprofits, however, can improve welfare. These results imply for competition law and regulation that “nonprofit” might be too crude a label for organizations with varying goals. Consequently, mergers among certain nonprofit organizations should not necessarily be treated in the same way as mergers among for-profit firms – a notion that is absent in current merger guidelines both in the US and the EU.",
keywords = "Nonprofits, Mergers, Antitrust, Governance, Owner Objectives, Notfor- profit Sector, Organizational Choice",
author = "J. Pr{\"u}fer",
note = "Subsequently published in the Journal of Competition Law & Economics, 2011 Pagination: 44",
year = "2007",
language = "English",
volume = "2007-82",
series = "CentER Discussion Paper",
publisher = "Microeconomics",
type = "WorkingPaper",
institution = "Microeconomics",

}

Prüfer, J 2007 'Competition and Mergers among Nonprofits' CentER Discussion Paper, vol. 2007-82, Microeconomics, Tilburg.

Competition and Mergers among Nonprofits. / Prüfer, J.

Tilburg : Microeconomics, 2007. (CentER Discussion Paper; Vol. 2007-82).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Competition and Mergers among Nonprofits

AU - Prüfer, J.

N1 - Subsequently published in the Journal of Competition Law & Economics, 2011 Pagination: 44

PY - 2007

Y1 - 2007

N2 - Should mergers among nonprofit organizations be regulated differently than mergers among for-profit firms? The relevant empirical literature is highly controversial, the theoretical literature is scarce. I analyze the question by modeling duopoly competition with quality-differentiated goods. I compare welfare effects of mergers between firms with the effects of mergers between nonprofits dominated by consumers, workers, suppliers, and pure donors respectively. I find that mergers both among firms and among most types of nonprofits do not increase welfare. Mergers among consumerdominated nonprofits, however, can improve welfare. These results imply for competition law and regulation that “nonprofit” might be too crude a label for organizations with varying goals. Consequently, mergers among certain nonprofit organizations should not necessarily be treated in the same way as mergers among for-profit firms – a notion that is absent in current merger guidelines both in the US and the EU.

AB - Should mergers among nonprofit organizations be regulated differently than mergers among for-profit firms? The relevant empirical literature is highly controversial, the theoretical literature is scarce. I analyze the question by modeling duopoly competition with quality-differentiated goods. I compare welfare effects of mergers between firms with the effects of mergers between nonprofits dominated by consumers, workers, suppliers, and pure donors respectively. I find that mergers both among firms and among most types of nonprofits do not increase welfare. Mergers among consumerdominated nonprofits, however, can improve welfare. These results imply for competition law and regulation that “nonprofit” might be too crude a label for organizations with varying goals. Consequently, mergers among certain nonprofit organizations should not necessarily be treated in the same way as mergers among for-profit firms – a notion that is absent in current merger guidelines both in the US and the EU.

KW - Nonprofits

KW - Mergers

KW - Antitrust

KW - Governance

KW - Owner Objectives

KW - Notfor- profit Sector

KW - Organizational Choice

M3 - Discussion paper

VL - 2007-82

T3 - CentER Discussion Paper

BT - Competition and Mergers among Nonprofits

PB - Microeconomics

CY - Tilburg

ER -

Prüfer J. Competition and Mergers among Nonprofits. Tilburg: Microeconomics. 2007. (CentER Discussion Paper).