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Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry

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  • Gérard Gaudet
  • Ngo Van Long
  • Antoine Soubeyran

Abstract

The purpose of this paper is to analyse the effect of upstream cost asymmetries on the behavior of integrated firms. The model highlights the respective roles of strategic considerations and of cost considerations in the determination of an integrated firm's interaction with the non integrated sector of the industry, on its relative upstream-downstream specialization.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Gérard Gaudet & Ngo Van Long & Antoine Soubeyran, 1999. "Upstream-Downstream Specialization by Integrated Firms in a Partially Integrated Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 14(4), pages 321-335, June.
    • Handle: RePEc:kap:revind:v:14:y:1999:i:4:p:321-335
    DOI: 10.1023/A:1007717513689
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    References listed on IDEAS

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    1. Oliver Hart & Jean Tirole, 1990. "Vertical Integration and Market Foreclosure," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1990 Micr), pages 205-286.
    2. Perry, Martin K., 1989. "Vertical integration: Determinants and effects," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 4, pages 183-255, Elsevier.
    3. Bonanno, Giacomo & Vickers, John, 1988. "Vertical Separation," Journal of Industrial Economics, Wiley Blackwell, vol. 36(3), pages 257-265, March.
    4. Géarard Gaudet & Ngo Van Long, 1996. "Vertical Integration, Foreclosure, and profits in the Presence of Double Marginalization," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 5(3), pages 409-432, September.
    5. Ordover, Janusz A & Saloner, Garth & Salop, Steven C, 1990. "Equilibrium Vertical Foreclosure," American Economic Review, American Economic Association, vol. 80(1), pages 127-142, March.
    6. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 345-356.
    7. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    8. Gaudet, Gerard & Long, Ngo Van, 1994. "On the effects of the distribution of initial endowments in a nonrenewable resource duopoly," Journal of Economic Dynamics and Control, Elsevier, vol. 18(6), pages 1189-1198, November.
    9. Johnsen, D Bruce, 1991. "Property Rights to Cartel Rents: The Socony-Vacuum Story," Journal of Law and Economics, University of Chicago Press, vol. 34(1), pages 177-203, April.
    10. Adelman, M. A., 1991. "User cost in oil production," Resources and Energy, Elsevier, vol. 13(3), pages 217-240, September.
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    Cited by:

    1. Ioannis N. Pinopoulos, 2017. "Upstream horizontal mergers and vertical integration," Discussion Paper Series 2017_07, Department of Economics, University of Macedonia, revised Aug 2017.
    2. Ivan Dufeu, 2004. "Market Size and Vertical Equilibrium in the Context of Successive Cournot Oligopolies," Working Papers hal-00581571, HAL.
    3. Singer, Marcos & Donoso, Patricio, 2008. "Upstream or downstream in the value chain?," Journal of Business Research, Elsevier, vol. 61(6), pages 669-677, June.
    4. Arunanondchai, May, 2001. "Can Indonesia Gain from Log Export Barriers?," The Warwick Economics Research Paper Series (TWERPS) 619, University of Warwick, Department of Economics.
    5. Rodrigo Barraza & Juan M. Sepúlveda & Ivan Derpich, 2022. "Location of the Intermediate Echelon to Add Purchase Value and Sustainability Criteria in a Mining Supply Network," Sustainability, MDPI, vol. 14(19), pages 1-14, October.
    6. Arunanondchai, May, 2002. "Can Indonesia Gain from Log Export Barriers?," Economic Research Papers 269389, University of Warwick - Department of Economics.

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    More about this item

    Keywords

    Oligopoly; vertical integration; specialization; oil industry;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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