Incentives for sabotage in vertically related industries
AbstractWe show that the incentives of a vertically integrated supplier to “sabotage” the activities of downstream rivals can vary with both the type of sabotage and the nature of downstream competition. Cost-increasing sabotage is typically profitable under both Cournot and Bertrand competition. In contrast, demand-reducing sabotage is often profitable under Cournot competition, but unprofitable under Bertrand competition. Incentives for sabotage can vary non-monotonically with the degree of product differentiation. Copyright Springer Science+Business Media, LLC 2007
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Bibliographic InfoArticle provided by Springer in its journal Journal of Regulatory Economics.
Volume (Year): 31 (2007)
Issue (Month): 3 (June)
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Web page: http://www.springerlink.com/link.asp?id=100298
Regulation; Sabotage; Vertically integrated industries; L51; L10; L22;
Other versions of this item:
- David Mandy & David E. M. Sappington, 2004. "Incentives for Sabotage in Vertically Related Industries," Working Papers 0404, Department of Economics, University of Missouri, revised 16 Dec 2004.
- C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
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