Upstream Competition between Vertically Integrated Firms
We propose a model of two-tier competition between vertically integrated firms and unintegrated downstream firms. We show that, even when integrated firms compete in prices to offer a homogeneous input, the Bertrand result may not obtain, and the input may be priced above marginal cost in equilibrium, which is detrimental to consumers' surplus and social welfare. We obtain that these partial foreclosure equilibria are more likely to exist when downstream competition is fierce. We then use our model to assess the impact of several regulatory tools in the telecommunications industry.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 59 (2011)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0022-1821|
References listed on IDEAS
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.:
- Lucy White & Volker Nocke, 2004.
"Do Vertical Mergers Facilitate Upstream Collusion?,"
2004 Meeting Papers
45, Society for Economic Dynamics.
- Volker Nocke & Lucy White, 2007. "Do Vertical Mergers Facilitate Upstream Collusion?," American Economic Review, American Economic Association, vol. 97(4), pages 1321-1339, September.
- Nocke, Volker & White, Lucy, 2004. "Do Vertical Mergers Facilitate Upstream Collusion?," CEPR Discussion Papers 4186, C.E.P.R. Discussion Papers.
- Volker Nocke & Lucy White, 2003. "Do Vertical Mergers Facilitate Upstream Collusion?," PIER Working Paper Archive 03-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Yongmin Chen & Michael H. Riordan, 2003. "Vertical Integration, Exclusive Dealing, and Ex Post Cartelization," Discussion Papers 0203-13, Columbia University, Department of Economics.
- David E. M Sappington, 2005. "On the Irrelevance of Input Prices for Make-or-Buy Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1631-1638, December.
- Höffler, Felix & Schmidt, Klaus M., 2008.
"Two tales on resale,"
International Journal of Industrial Organization,
Elsevier, vol. 26(6), pages 1448-1460, November.
- Höffler, Felix & Schmidt, Klaus M., 2007. "Two Tales on Resale," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 198, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Höffler, Felix & Schmidt, Klaus M., 2008. "Two tales on resale," Munich Reprints in Economics 19443, University of Munich, Department of Economics.
- Höeffler, Felix & Schmidt, Klaus M., 2007. "Two Tales on Resale," CEPR Discussion Papers 6248, C.E.P.R. Discussion Papers.
- repec:hal:wpaper:hal-00440126 is not listed on IDEAS
- Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, June.
- Duarte Brito & Pedro Pereira, 2006.
"Access to Bottleneck Inputs under Oligopoly: a Prisoners Dilemma?,"
16, Portuguese Competition Authority.
- Duarte Brito & Pedro Pereira, 2010. "Access to Bottleneck Inputs under Oligopoly: A Prisoners’ Dilemma?," Southern Economic Journal, Southern Economic Association, vol. 76(3), pages 660-677, January.
- de Bijl,Paul & Peitz,Martin, 2003.
"Regulation and Entry into Telecommunications Markets,"
Cambridge University Press, number 9780521808378.
- de Bijl,Paul & Peitz,Martin, 2008. "Regulation and Entry into Telecommunications Markets," Cambridge Books, Cambridge University Press, number 9780521066631.
- Marc Bourreau & Johan Hombert & Jerome Pouyet & Nicolas Schutz, 2011.
"Upstream Competition between Vertically Integrated Firms,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 59(4), pages 677-713, December.
- Marc Bourreau & Johan Hombert & Jérôme Pouyet & Nicolas Schutz, 2011. "Upstream Competition between Vertically Integrated Firms," Post-Print hal-00656608, HAL.
- Marc Bourreau & Johan Hombert & Jérôme Pouyet & Nicolas Schutz, 2009. "Upstream Competition between Vertically Integrated Firms," PSE Working Papers hal-00440126, HAL.
- Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, June.
- Fauli-Oller, Ramon & Sandonis, Joel, 2002. "Welfare reducing licensing," Games and Economic Behavior, Elsevier, vol. 41(2), pages 192-205, November.
- Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
- Salinger, Michael A, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, MIT Press, vol. 103(2), pages 345-56, May.
When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:59:y:2011:i:4:p:677-713. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.