IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v23y2016i2p101-106.html
   My bibliography  Save this article

Nonexclusionary input prices under quantity competition: vertical integration, foreclosure and sabotage

Author

Listed:
  • Soheil R. Nadimi
  • Dennis L. Weisman

Abstract

A vertically integrated provider is a monopoly supplier of an input essential for its rival to produce downstream output. Market exclusion in the form of inefficient foreclosure or sabotage can arise when input prices are, respectively, 'too high' or 'too low' relative to the downstream price. The range of nonexclusionary input prices within which neither form of market exclusion arises is determined by displacement ratios. The safe harbour range of downstream-to-upstream 'price-cost' margin ratios is decreasing in the degree of product homogeneity and approaches a single ratio in the limit as the products become perfectly homogeneous. The bounds of nonexclusionary input prices are markedly wider under Bertrand-Nash competition than they are under Stackelberg competition.

Suggested Citation

  • Soheil R. Nadimi & Dennis L. Weisman, 2016. "Nonexclusionary input prices under quantity competition: vertical integration, foreclosure and sabotage," Applied Economics Letters, Taylor & Francis Journals, vol. 23(2), pages 101-106, February.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:2:p:101-106
    DOI: 10.1080/13504851.2015.1054062
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2015.1054062
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2015.1054062?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:23:y:2016:i:2:p:101-106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.