Excess Entry, Vertical Integration and Welfare
AbstractThis paper provides a systematic analysis of the welfare effects of vertical integration by a monopolistic input supplier into a monopolistically competitive downstream industry. We give sufficient conditions on consumer preferences that lead to Pareto improving vertical integration. We demonstrate a close relationship between assumptions on preference for variety, excess entry in monopolistically competitive markets, and the welfare effects of vertical integration. Both excess entry and welfare improving vertical integration arise only if preference for variety falls as variety increases for given total output.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1293.
Date of creation: Nov 1995
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Federico Boffa & John Panzar, 2012.
"Bottleneck co-ownership as a regulatory alternative,"
Journal of Regulatory Economics,
Springer, vol. 41(2), pages 201-215, April.
- Federico Boffa & John Panzar, 2011. "Bottleneck co-ownership as a regulatory alternative," Working Papers 2011/38, Institut d'Economia de Barcelona (IEB).
- Hattori, Keisuke & Yoshikawa, Takeshi, 2013. "Free Entry and Social Inefficiency under Co-opetition," MPRA Paper 44816, University Library of Munich, Germany.
- G. Chemla, 1999.
"Downstream competition, foreclosure, and vertical integration,"
THEMA Working Papers
99-18, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Chemla, G., 1999. "Downstream Competition, Foreclosure, and Vertical Integration," Papers 99-18, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- Inderst, Roman & Wey, Christian, 2003.
" Bargaining, Mergers, and Technology Choice in Bilaterally Oligopolistic Industries,"
RAND Journal of Economics,
The RAND Corporation, vol. 34(1), pages 1-19, Spring.
- Roman Inderst & Christian Wey, 2001. "Bargaining, Mergers, and Technology Choice in Bilaterally Oligopolistic Industries," CIG Working Papers FS IV 01-19, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Inderst, Roman & Wey, Christian, 2001. "Bargaining, Mergers and Technology Choice in Bilaterally Oligopolistic Industries," CEPR Discussion Papers 2981, C.E.P.R. Discussion Papers.
- María Fernanda Viecens, 2009. "Pricing strategies in two-sided platforms: The role of sellers’ competition," Working Papers 2009-11, FEDEA.
- Evgeny Zhelobodko & Sergey Kokovin & Mathieu Parenti & Jacques‐François Thisse, 2012.
"Monopolistic Competition: Beyond the Constant Elasticity of Substitution,"
Econometric Society, vol. 80(6), pages 2765-2784, November.
- ZHELOBODKO, Evgeny & KOKOVIN, Sergey & Parenti, Mathieu & THISSE, Jacques-François, . "Monopolistic competition beyond the constant elasticity of substitution," CORE Discussion Papers RP -2488, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- PARENTI, Mathieu & ,, 2013. "Large and small firms in a global market: David vs. Goliath," CORE Discussion Papers 2013058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gilles Chemla & Gilles Chemla, 2003. "Downstream Competition, Foreclosure and Vertical Integration," Post-Print halshs-00679847, HAL.
- Swati Dhingra & John Morrow, 2012.
"The Impact of Integration on Productivity and Welfare Distortions Under Monopolistic Competition,"
CEP Discussion Papers
dp1130, Centre for Economic Performance, LSE.
- Swati Dhingra & John Morrow, 2012. "The Impact of Integration on Productivity and Welfare Distortions Under Monopolistic Competition," FIW Working Paper series 088, FIW.
- Zenger, Hans, 2009. "Successive Monopolies with Endogenous Quality," MPRA Paper 15659, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.