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Price Discrimination and Forward Integration

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  • Martin K. Perry

Abstract

An input monopolist could price discriminate among all downstream industries by integrating into all but the one with the most inelastic derived demand. We demonstrate that a dominant firm will have a similar incentive to integrate into industries with more elastic derived demands. However, the extent of the fringe of competitive input suppliers will determine the number of such industries into which integration can profitability be maintained.

Suggested Citation

  • Martin K. Perry, 1978. "Price Discrimination and Forward Integration," Bell Journal of Economics, The RAND Corporation, vol. 9(1), pages 209-217, Spring.
  • Handle: RePEc:rje:bellje:v:9:y:1978:i:spring:p:209-217
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    Cited by:

    1. William James Adams, 1987. "Should merger policy be changed? An antitrust perspective," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 31, pages 173-198.
    2. George W. J. Hendrikse, 1998. "Screening, Competition and the Choice of the Cooperative as an Organisational Form," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(2), pages 202-217.
    3. Jain, Amit, 2011. "Connaissance, ressources, concurrence et les frontières de l'entreprise," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/6403 edited by Thiétart, Raymond-Alain, August.
    4. repec:eee:eneeco:v:67:y:2017:i:c:p:355-365 is not listed on IDEAS
    5. Adams, Wendi L. & Love, H. Alan & Capps, Oral, Jr., 1997. "Structural Analysis Of Mergers And Acquisitions In The Food Industry," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(2), July.
    6. Brunekreeft, Gert, 1997. "Open access vs. common carriage in electricity supply," Energy Economics, Elsevier, vol. 19(2), pages 225-238, May.
    7. Brunekreeft, Gert, 2015. "Network unbundling and flawed coordination: Experience from the electricity sector," Utilities Policy, Elsevier, vol. 34(C), pages 11-18.
    8. Roland Meyer, 2012. "Vertical Economies and the Costs of Separating Electricity Supply--A Review of Theoretical and Empirical Literature," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).

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