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Models of vertical market relations


  • Inderst, Roman


I contrast various models of vertical contracting that view upstream interactions either through the lenses of bilateral contracting and negotiations or through the lenses of a "market interface" with uniform contractual terms. Existing models contrast starkly in their policy implications, in particular when imperfect horizontal competition, on either the upstream or the downstream level, interacts with differential buyer power. Depending on industry characteristics, different assumptions on contracting may be appropriate. Even though the quest for an all-encompassing modelling framework seems vain, existing models can still be made more flexible, so as to be of greater practical usage.

Suggested Citation

  • Inderst, Roman, 2010. "Models of vertical market relations," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 341-344, July.
  • Handle: RePEc:eee:indorg:v:28:y:2010:i:4:p:341-344

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    References listed on IDEAS

    1. Patrick Rey & Thibaud Vergé, 2004. "Bilateral Control with Vertical Contracts," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 728-746, Winter.
    2. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, Oxford University Press, vol. 103(2), pages 345-356.
    3. Hart, O. & Tirole, J., 1990. "Vertical Integration And Market Foreclosure," Working papers 548, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Dobson, Paul W. & Waterson, Michael, 2007. "The competition effects of industry-wide vertical price fixing in bilateral oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(5), pages 935-962, October.
    5. DeGraba, Patrick, 1990. "Input Market Price Discrimination and the Choice of Technology," American Economic Review, American Economic Association, vol. 80(5), pages 1246-1253, December.
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    Cited by:

    1. Ghosh, Arghya & Morita, Hodaka & Wang, Chengsi, 2014. "Horizontal mergers in the presence of vertical relationships," Working Papers 14-27, University of Mannheim, Department of Economics.
    2. Gianpaolo Rossini & Cecilia Vergari, 2014. "The Discrete Charm of Uniform Linear Pricing of an Input Production Joint Venture," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 8(2), pages 68-83, October.
    3. repec:kap:jincot:v:18:y:2018:i:1:d:10.1007_s10842-017-0251-6 is not listed on IDEAS
    4. Chrysovalantou Milliou & Joel Sandonis, 2018. "Manufacturer Mergers and Product Variety in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 18(1), pages 1-24, March.
    5. Ramon Fauli-Oller & Joel Sandonis, 2016. "Welfare Effects Of Downstream Mergers And Upstream Market Concentration," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-16, December.
    6. Alipranti, Maria & Milliou, Chrysovalantou & Petrakis, Emmanuel, 2015. "On vertical relations and the timing of technology adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 120(C), pages 117-129.
    7. Mérel, Pierre & Sexton, Richard J., 2017. "Buyer power with atomistic upstream entry: Can downstream consolidation increase production and welfare?," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 259-293.
    8. Teichmann, Isabel & von Schlippenbach, Vanessa, 2015. "Collusive effects of a monopolist's use of an intermediary to deliver to retailers," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 112948, Verein für Socialpolitik / German Economic Association.
    9. Ioannis Pinopoulos, 2014. "Downstream Market Power and the Lerner Index," Discussion Paper Series 2014_07, Department of Economics, University of Macedonia, revised Nov 2014.
    10. Isabel Teichmann & Vanessa von Schlippenbach, 2014. "Collusive Effects of a Monopolist's Use of an Intermediary to Deliver to Retailers," Discussion Papers of DIW Berlin 1440, DIW Berlin, German Institute for Economic Research.


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