Upstream market foreclosure
AbstractThis paper investigates how an incumbent monopolistic can weaken potential rivals or deter entry in the output market by manipulating the access of these rivals in the input market. We analyze two polar cases. In the first one, the input market is assumed to be competitive with the input being supplied inelastically. We show that the situation opens the door to entry deterrence. Then, we assume that the input is supplied by a single seller who chooses the input price. In this case we show that entry deterrence can be reached only through merger with the seller of the input.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006024.
Date of creation: 01 Feb 2006
Date of revision:
Entry deterrence; Foreclosure; Overinvestment; Bilateral monopoly;
Other versions of this item:
- GABSZEWICZ, Jean J. & ZANAJ, Skerdilajda, 2006. "Upstream market foreclosure," CORE Discussion Papers 2006043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- GABSZEWICZ, Jean J. & ZANAJ, Skerdilajda, . "Upstream market foreclosure," CORE Discussion Papers RP -2008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- D20 - Microeconomics - - Production and Organizations - - - General
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-04 (All new papers)
- NEP-COM-2006-11-04 (Industrial Competition)
- NEP-MIC-2006-11-04 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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