Vertical integration and downstream collusion
نویسندگان
چکیده
منابع مشابه
Dynamic downstream collusion with secret vertical contracts
We consider dynamic, infinitely repeated downstream price competition. In every period, a retailer cannot observe the contract that the competing retailer offers to a joint supplier. We find that even though contracts are secret, they enable retailers to collude. The more the retailers and the supplier care about future profits, retailers obtain a higher share of the monopoly profits. We also f...
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This paper analyzes the effect of competition among downstream rms on an upstream rm’s payoff and on its incentive to integrate vertically when rms in both segments negotiate optimal contracts. We argue that as downstream competition becomes more intense, the upstream rm obtains a larger share of a smaller downstream industry prot. The upstream rm may encourage downstream competition (eve...
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This paper analyzes the impact vertical integration has on upstream collusion when the price of the input is linear. As a first step, the paper derives the collusive equilibrium that requires the lowest discount factor in the infinitely repeated game when one firm is vertically integrated. It turns out this is the joint-profit maximum of the colluding firms. The discount factor needed to sustai...
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In this paper, we aim at investigating from a game theory perspective whether trade liberalization can promote a collusive intra-industry trade and whether such a collusive trade is always socially desirable compared to the autarchy solution. We show that, under Cournot competition, economic integration is anti-competitive if collusive trade is a possible outcome of the repeated game; under pri...
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In this paper we investigate the impact of vertical mergers on upstream firms’ ability to sustain collusion. We show in a number of models that the net effect of vertical integration is to facilitate collusion. Several effects arise. When upstream offers are secret, vertical mergers faciliate collusion through the operation of a foreclosure effect: Cheating unintegrated firms can no longer prof...
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ژورنال
عنوان ژورنال: International Journal of Industrial Organization
سال: 2017
ISSN: 0167-7187
DOI: 10.1016/j.ijindorg.2017.05.001