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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

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    References listed on IDEAS

    as
    1. Mark Armstrong & Robert Porter (ed.), 2007. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 3, number 1.
    2. Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 347-347.
    3. 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.
    4. 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.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

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

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