Equilibrium structures in vertical oligopoly
The central purpose of this paper is to examine vertical integration as an equilibrium phenomenon. We model it as integration between Cournot oligopolists in both the upstream and the downstream stages. We consider the issue of private profitability versus collective profitability and show that under several situations the equilibrium outcomes may result in a Prisoner's dilemma. The analysis is extended to consider equilibrium outcomes in a dynamic setting, where we find no integration to be a relatively common outcome.
|Date of creation:||26 Jun 2003|
|Note:||Type of Document - Acrobat PDF; prepared on IBM PC; to print on HP/PostScript; pages: 18 ; figures: included/request from author/draw your own|
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- Grossman, Sanford J & Hart, Oliver D, 1986.
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- Muris, Timothy J & Scheffman, David T & Spiller, Pablo T, 1992. "Strategy and Transaction Costs: The Organization of Distribution in the Carbonated Soft Drink Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(1), pages 83-128, Spring.
- Alexander Schrader & Stephen Martin, 1998. "Vertical Market Participation," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 321-331, June. Full references (including those not matched with items on IDEAS)
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