We investigate how different types of merger affect input prices, research levels and equilibrium profits in vertical market structures when there is research activity in the upstream market that spills over to the downstream retailers. To do so, we develop a very simple model where three downstream Cournot oligopolists are served by monopolist plant-specific input suppliers. We consider a situation in which both vertical and horizontal integration are feasible and we investigate which equilibrium structures are likely to emerge following an initial merger between two units.
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Paper provided by Department of Economics, University of York in its series Discussion Papers with number
04/12.
Length: Date of creation: Date of revision: Handle: RePEc:yor:yorken:04/12
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