IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v88y1998i5p1232-48.html
   My bibliography  Save this article

Anticompetitive Vertical Integration by a Dominant Firm

Author

Listed:
  • Riordan, Michael H

Abstract

Backward vertical integration by a dominant firm into an upstream competitive industry causes both input and output prices to rise. The dominant firm's advantage may or may not offset the negative effect of higher prices on social welfare. Whether it does depends on a simple indicator derived from input and output market shares and the degree of prior vertical integration. A vertical merger is similar to a hypothetical horizontal merger, suggesting that vertical merger policy for this industry should be similar to horizontal merger policy. The dominant firm model yields an observable sufficient indicator of welfare-improving vertical mergers. Copyright 1998 by American Economic Association.

Suggested Citation

  • Riordan, Michael H, 1998. "Anticompetitive Vertical Integration by a Dominant Firm," American Economic Review, American Economic Association, vol. 88(5), pages 1232-1248, December.
    • Handle: RePEc:aea:aecrev:v:88:y:1998:i:5:p:1232-48
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0002-8282%28199812%2988%3A5%3C1232%3AAVIBAD%3E2.0.CO%3B2-C&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:88:y:1998:i:5:p:1232-48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.