Roman Inderst () (London School of Economics & Political Science) Tommaso Valletti () (Imperial College London, University of Rome "Tor Vergata" and CEPR)
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This paper analyzes merchant markets in the presence of vertically-integrated firms. We discuss when vertical integration tends to increase the elasticity of (derived) demand in the merchant market because of indirect contraints arising from the retail market. We also discuss the relevance of different measures of market power such as market shares in the wholesale or retail market. We provide insights into the likely effect of an upstream merger under vertical integration, depending on, for instance, whether the integrated firm currently sells into the merchant market or whether this can be expected after the merger.
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Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number
74.
Length: 44 Date of creation: 01 Sep 2006 Date of revision: Handle: RePEc:rtv:ceisrp:74
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