Competition and Regulation in Vertically Related Markets
In an industry where naturally monopolistic and competitive activities are vertically related, should the natural monopolist be allowed also to operate in the deregulated competitive sector? Unlike much of the literature on vertical integration, this paper assumes that monopoly pricing behaviour is regulated, and therefore the effect of vertical integration on the task of regulation is central to the analysis. In the model there is both imperfect information and imperfect competition. When vertical integration by the monopolist is allowed, the regulator's task is made harder insofar as the monopolist has anticompetitive incentives to raise rivals' costs. On the other hand, integration may lead to there being fewer firms in the deregulated sector and hence less duplication of fixed costs. The overall welfare comparison between separation and integration is ambiguous, as two simple examples illustrate. Various extensions to the analysis are also considered.
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): 62 (1995)
Issue (Month): 1 ()
|Contact details of provider:|| |
When requesting a correction, please mention this item's handle: RePEc:oup:restud:v:62:y:1995:i:1:p:1-17.. 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: (Oxford University Press)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.