IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-08d40036.html

Vertical mergers that eliminate double markups are procompetitive

Author

Listed:
  • Simon Loertscher

    (University of Melbourne)

Abstract

Assuming that oligopolistic downstream firms take intermediate goods prices as given and that upstream and integrated firms choose their quantities first and simultaneously, this note shows that vertical mergers between upstream and downstream firms are procompetitive.

Suggested Citation

  • Simon Loertscher, 2008. "Vertical mergers that eliminate double markups are procompetitive," Economics Bulletin, AccessEcon, vol. 4(22), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-08d40036
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2008/Volume4/EB-08D40036A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 345-356.
    2. Rey, Patrick & Tirole, Jean, 2007. "A Primer on Foreclosure," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 33, pages 2145-2220, Elsevier.
    3. Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 347-347.
    4. Mark Armstrong & Robert Porter (ed.), 2007. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 3, number 1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Obradovits, 2013. "Excessive supplier pricing and high-quality foreclosure," Vienna Economics Papers vie1303, University of Vienna, Department of Economics.
    2. Guanming Shi & Kyle W. Stiegert & Jean P. Chavas, 2011. "An analysis of bundle pricing in horizontal and vertical markets: The case of the U.S. cottonseed market," Agricultural Economics, International Association of Agricultural Economists, vol. 42, pages 77-88, November.
    3. Bruno Jullien & Markus Reisinger & Patrick Rey, 2023. "Personalized Pricing and Distribution Strategies," Management Science, INFORMS, vol. 69(3), pages 1687-1702, March.
    4. Normann, Hans-Theo, 2009. "Vertical integration, raising rivals' costs and upstream collusion," European Economic Review, Elsevier, vol. 53(4), pages 461-480, May.
    5. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2008. "The Make-or-Buy Decision in the Presence of a Rival: Strategic Outsourcing to a Common Supplier," Management Science, INFORMS, vol. 54(10), pages 1747-1758, October.
    6. Papadopoulos, Konstantinos G. & Petrakis, Emmanuel & Skartados, Panagiotis, 2021. "The ambiguous competitive effects of passive partial forward integration," UC3M Working papers. Economics 33354, Universidad Carlos III de Madrid. Departamento de Economía.
    7. Matsushima Noriaki & Mizuno Tomomichi, 2012. "Equilibrium Vertical Integration with Complementary Input Markets," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 12(1), pages 1-32, June.
    8. Noriaki Matsushima & Tomomichi Mizuno, 2010. "How do market structures affect decisions on vertical integration/separation?," ISER Discussion Paper 0770, Institute of Social and Economic Research, The University of Osaka.
    9. Martin Obradovits, 2013. "Excessive supplier pricing and high-quality foreclosure," Vienna Economics Papers 1303, University of Vienna, Department of Economics.
    10. Nobel Prize Committee, 2014. "Market power and regulation (scientific background)," Nobel Prize in Economics documents 2014-2, Nobel Prize Committee.
    11. Stöhr, Annika & Noskova, Victoriia & Kunz-Kaltenhäuser, Philipp & Gänßle, Sophia & Budzinski, Oliver, 2019. "Happily ever after? Vertical and horizontal mergers in the U.S. media industry," Ilmenau Economics Discussion Papers 126, Ilmenau University of Technology, Institute of Economics.
    12. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    13. Rey, Patrick & Salant, David, 2012. "Abuse of dominance and licensing of intellectual property," International Journal of Industrial Organization, Elsevier, vol. 30(6), pages 518-527.
    14. Milliou, Chrysovalantou, 2020. "Vertical integration without intrafirm trade," Economics Letters, Elsevier, vol. 192(C).
    15. P. Giannoccolo & C. Vergari, 2015. "Revealing incentives for vertical integration in the presence of glocal policies," Working Papers wp1015, Dipartimento Scienze Economiche, Universita' di Bologna.
    16. Christopher S. Yoo, 2017. "Avoiding the Pitfalls of Net Uniformity: Zero Rating and Nondiscrimination," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(4), pages 509-536, June.
    17. Robert Hahn & Robert Litan & Hal Singer, 2010. "Addressing the next wave of Internet regulation: Toward a workable principle for nondiscrimination," Regulation & Governance, John Wiley & Sons, vol. 4(3), pages 365-382, September.
    18. Annette Kirstein & Roland Kirstein, 2009. "Collective Wage Agreements on Fixed Wages and Piece Rates May Cartelize Product Markets," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(2), pages 250-259, June.
    19. Symeonidis, George, 2010. "Downstream merger and welfare in a bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 230-243, May.
    20. Filippo Vergara Caffarelli, 2007. "Merge and Compete: Strategic Incentives for Vertical Integration," Rivista di Politica Economica, SIPI Spa, vol. 97(5), pages 203-244, September.

    More about this item

    Keywords

    ;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

    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:ebl:ecbull:eb-08d40036. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc 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 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: John P. Conley (email available below). General contact details of provider: .

    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.