Asymmetric Vertical Integration

Asymmetric Vertical Integration

We examine vertical backward integration in a reducedform model of successive oligopolies. Our key findings are: (i) There may be asymmetric equilibria where some firms integrate and others remain separated, even if firms are symmetric initially; (ii) Efficient firms are more likely to integrate vertically. As a result, integrated firms also tend to have a large market share. The driving force ...

Production Technology, Information Technology, and Vertical Integration under Asymmetric Information

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Asymmetric Integration

We use a standard repeated game framework and assume imperfect competition to examine how the feasibility of trade agreements is affected by the presence of asymmetries in market size, wage levels and labor productivities. The results regarding asymmetries in market size are consistent with the traditional literature: the country with the larger market is more likely to defect and transfers fro...

Is Vertical Integration Anticompetitive?

Vertical Integration and Production

We use two very large datasets to obtain some of the first systematic micro evidence on how production in vertically integrated firms differs from that of unlinked producers in the same industries. The Economic Census lets us observe virtually every establishment in the private economy, and crucially, the organizational structures of the firms that own them. The Commodity Flow Survey microdata ...