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Vertical Integration and Shared Facilities in Unregulated Industries

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Author Info
Felipe Balmaceda(University of Chile), Eduardo Saavedra(Georgetown University/Ilades) () (Georgetown University/Ilades M.A. Program in Economics, Santiago, Chile)
Abstract

In this paper we consider a market situation in which initially there is an unintegrated monopoly upstream that owns an essential facility and two downstream firms. Then the market is liberalized allowing upstream entry and vertical integration. The equilibrium entry mode--sharing the incumbent facility or building a new facility--is derived as well as the equilibrium market structure. Several policy prescriptions are set forth. Classification-JEL Codes: D43, D61, L22, L13, L41, L42

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File URL: http://www.uahurtado.cl/docum/economia/papers/saavedra-vertint.pdf
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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~04-04-13.

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Handle: RePEc:geo:guwopa:gueconwpa~04-04-13

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Related research
Keywords: Essential facilities; shared-facility agreements; Vertical integration; Strategic substitutes;

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  1. Felipe Balmaceda, 2006. "Mergers and CEO power," Documentos de Trabajo 224, Centro de Economía Aplicada, Universidad de Chile. [Downloadable!]
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