IDEAS home Printed from
   My bibliography  Save this article

Vertical merger, collusion, and disruptive buyers


  • Nocke, Volker
  • White, Lucy


In a repeated game setting of a vertically related industry, we study the collusive effects of vertical mergers. We show that any vertical merger facilitates upstream collusion, no matter how large (in terms of capacity or size of product portfolio) the integrated downstream buyer. But a vertical merger with a larger buyer helps more to facilitate upstream collusion than a similar merger with a smaller buyer. This formalizes the idea expressed in the U.S. and EU Non-Horizontal Merger Guidelines that some downstream buyers may be more "disruptive" of collusive schemes than others.

Suggested Citation

  • Nocke, Volker & White, Lucy, 2010. "Vertical merger, collusion, and disruptive buyers," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 350-354, July.
  • Handle: RePEc:eee:indorg:v:28:y:2010:i:4:p:350-354

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    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:

    References listed on IDEAS

    1. Nocke, Volker & White, Lucy, 2010. "Vertical merger, collusion, and disruptive buyers," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 350-354, July.
    2. Volker Nocke & Lucy White, 2007. "Do Vertical Mergers Facilitate Upstream Collusion?," American Economic Review, American Economic Association, vol. 97(4), pages 1321-1339, September.
    3. George J. Mailath & Volker Nocke & Lucy White, 2004. "When the Punishment Must Fit the Crime: Remarks on the Failure of Simple Penal Codes in Extensive-Form Games," PIER Working Paper Archive 04-039, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    4. Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002. "Capacity constraints, mergers and collusion," European Economic Review, Elsevier, vol. 46(1), pages 1-29, January.
    5. Xavier Vives, 2001. "Oligopoly Pricing: Old Ideas and New Tools," MIT Press Books, The MIT Press, edition 1, volume 1, number 026272040x, July.
    6. Kühn, Kai-Uwe & Rimler, Michael S, 2006. "The Comparative Statics of Collusion Models," CEPR Discussion Papers 5742, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Mariana Cunha & Paula Sarmento, 2014. "Does Vertical Integration Promote Downstream Incomplete Collusion? An Evaluation of Static and Dynamic Stability," Journal of Industry, Competition and Trade, Springer, vol. 14(1), pages 1-38, March.
    2. Rey, Patrick & Verge, T., 2016. "Secret contracting in multilateral relations," TSE Working Papers 16-744, Toulouse School of Economics (TSE), revised Jul 2017.
    3. Reisinger, Markus & Thomes, Tim Paul, 2017. "Manufacturer collusion: Strategic implications of the channel structure," DICE Discussion Papers 261, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    4. Patrick Rey & Thibaud Vergé, 2017. "Secret contracting in multilateral relations," Working Papers 2017-44, Center for Research in Economics and Statistics.
    5. Nocke, Volker & White, Lucy, 2010. "Vertical merger, collusion, and disruptive buyers," International Journal of Industrial Organization, Elsevier, vol. 28(4), pages 350-354, July.
    6. 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.
    7. 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.

    More about this item


    Vertical merger Collusion Disruptive buyer Merger guidelines Repeated game;

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General


    Access and download statistics


    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:eee:indorg:v:28:y:2010:i:4:p:350-354. 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: (Dana Niculescu). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.