IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v31y2024i6p524-529.html
   My bibliography  Save this article

Bertrand competition in vertically related markets

Author

Listed:
  • Tomomichi Mizuno
  • Kazuhiro Takauchi

Abstract

We build a successive Bertrand model with a homogenous good. We show that increasing the production efficiency of an industry can reduce firms’ profits. We also show that this result holds in the successive Cournot model. Hence, an industrial policy aimed at improving production efficiency may be undesirable for firms.

Suggested Citation

  • Tomomichi Mizuno & Kazuhiro Takauchi, 2024. "Bertrand competition in vertically related markets," Applied Economics Letters, Taylor & Francis Journals, vol. 31(6), pages 524-529, March.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:6:p:524-529
    DOI: 10.1080/13504851.2022.2140101
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/13504851.2022.2140101
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/13504851.2022.2140101?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    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

    as
    1. Matsushima, Noriaki, 2006. "Industry profits and free entry in input markets," Economics Letters, Elsevier, vol. 93(3), pages 329-336, December.
    2. Marie‐Laure Cabon‐Dhersin & Nicolas Drouhin, 2014. "Tacit Collusion in a One‐Shot Game of Price Competition with Soft Capacity Constraints," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 427-442, June.
    3. David Flath, 2012. "Are There Any Cournot Industries in Japan?," Japanese Economy, Taylor & Francis Journals, vol. 39(2), pages 3-36.
    4. Marie‐Laure Cabon‐Dhersin & Nicolas Drouhin, 2014. "Tacit Collusion in a One‐Shot Game of Price Competition with Soft Capacity Constraints," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 23(2), pages 427-442, June.
    5. Michael A. Salinger, 1988. "Vertical Mergers and Market Foreclosure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(2), pages 345-356.
    6. Tomomichi Mizuno & Kazuhiro Takauchi, 2020. "Optimal Export Policy With Upstream Price Competition," Manchester School, University of Manchester, vol. 88(2), pages 324-348, March.
    7. Mukherjee, Arijit, 2019. "Profit raising entry in a vertical structure," Economics Letters, Elsevier, vol. 183(C), pages 1-1.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kazuhiro Takauchi & Tomomichi Mizuno, 2022. "Endogenous transport price, R&D spillovers, and trade," The World Economy, Wiley Blackwell, vol. 45(5), pages 1477-1500, May.
    2. Kazuhiro Takauchi & Tomomichi Mizuno, 2019. "Is competition in the transport industry bad?A welfare analysis of R&D with inter-regional transportation," Discussion Papers 1910, Graduate School of Economics, Kobe University.
    3. Tomomichi Mizuno & Kazuhiro Takauchi, 2020. "Optimal Export Policy With Upstream Price Competition," Manchester School, University of Manchester, vol. 88(2), pages 324-348, March.
    4. Habiger, Peter & Kopel, Michael, 2020. "Strategic delegation in successive oligopolies with differentiated firms," Economics Letters, Elsevier, vol. 194(C).
    5. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2020. "A general model of price competition with soft capacity constraints," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 70(1), pages 95-120, July.
    6. Marie-Laure Cabon-Dhersin & Jonas Didisse, 2017. "Inter-university competition and high tuition fees," Post-Print hal-02356872, HAL.
    7. Erotokritos Varelas, 2014. "Bank structure and public debt," Discussion Paper Series 2014_06, Department of Economics, University of Macedonia, revised Sep 2014.
    8. Burguet, Roberto & Sákovics, József, 2014. "Bertrand and the long run," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-38, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Tomomichi Mizuno, 2009. "Divisionalization And Horizontal Mergers In A Vertical Relationship," Manchester School, University of Manchester, vol. 77(3), pages 317-336, June.
    10. Burguet, Roberto & Sákovics, József, 2017. "Bertrand and the long run," International Journal of Industrial Organization, Elsevier, vol. 51(C), pages 39-55.
    11. Tsuyoshi Toshimitsu, 2021. "Note on a profit-raising entry effect in a differentiated Cournot oligopoly market with network compatibility," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 48(2), pages 245-255, June.
    12. Arijit Mukherjee & Udo Broll & Soma Mukherjee, 2009. "The welfare effects of entry: the role of the input market," Journal of Economics, Springer, vol. 98(3), pages 189-201, December.
    13. Ioannis N. Pinopoulos, 2011. "Input foreclosure under alternative entry conditions in the upstream market," Discussion Paper Series 2011_15, Department of Economics, University of Macedonia, revised Nov 2011.
    14. Wu, Jie & Lu, Wei & Ji, Xiang, 2023. "The interactions between upstream quality disclosure and downstream entry," European Journal of Operational Research, Elsevier, vol. 309(2), pages 545-559.
    15. Ioannis N. Pinopoulos, 2014. "Equilibrium downstream mark-up and upstream free entry," Discussion Paper Series 2014_02, Department of Economics, University of Macedonia, revised Sep 2014.
    16. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2021. "Chamberlin without differentiation: Soft-capacity constrained price competition with free entry," Working Papers halshs-03378500, HAL.
    17. Werner Güth & Manfred Stadler & Alexandra Zaby, 2019. "Coordination Failure in Capacity-then-Price-Setting Games," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 36(3), pages 111-133, December.
    18. Wang, Kuang-Cheng A. & Koo, Hui-Wen & Chen, Tain-Jy, 2011. "Domestic trade protection in vertically-related markets," Economic Modelling, Elsevier, vol. 28(4), pages 1595-1603, July.
    19. Marie-Laure Cabon-Dhersin & Nicolas Drouhin, 2020. "Soft-Capacity constrained price competition with entry and a minimum firm size: Chamberlin without differentiation," Working Papers hal-02909801, HAL.
    20. Cabon-Dhersin Marie-Laure & Drouhin Nicolas, 2017. "A general model of price competition with soft capacity constraints," Working Papers 2017-56, Center for Research in Economics and Statistics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    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:taf:apeclt:v:31:y:2024:i:6:p:524-529. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.