Endogenous Industry Structure in Vertical Duopoly
AbstractThis paper examines integration decisions of successive duopolists. It is shown that qualitatively the same pattern of integration emerges whether there is Cournot or Bertrand competition in the input market. The degree of integration in the industry is increasing in the size of the downstream market and decreasing in the average marginal cost of the industry and in the fixed integration cost. There jis a tendency for partial integration when one upstream firm is relatively efficient compared to its rival.
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Bibliographic InfoPaper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Economics of Industry Papers with number 07.
Date of creation: Jul 1994
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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp
Endogenous industry structure; vertical duopoly; integration; competition; market.;
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