Anticompetitive Vertical Merger Waves

Johan Hombert (), Jerome Pouyet and Nicolas Schutz

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We develop a model of vertical merger waves and use it to study the optimal merger policy. As a merger wave can result in partial foreclosure, it can be optimal to ban a vertical merger that eliminates the last unintegrated upstream firm. Such a merger is more likely to worsen market performance when the number of downstream firms is large relative to the number of upstream firms, and when upstream contracts are nondiscriminatory, linear, and public. On the other hand, the optimal merger policy can be non-monotonic in the strength of synergies or in the degree of downstream product differentiation.

Keywords: vertical mergers; vertical foreclosure; merger waves; merger policy (search for similar items in EconPapers)
JEL-codes: L13 (search for similar items in EconPapers)
Pages: 32
Date: 2019-04
New Economics Papers: this item is included in nep-bec, nep-com, nep-cta, nep-gth, nep-mic and nep-ore
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Citations: View citations in EconPapers (3)

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https://www.crctr224.de/research/discussion-papers/archive/dp084 (application/pdf)

Related works:
Working Paper: Anticompetitive Vertical Merger Waves (2020)
Journal Article: Anticompetitive Vertical Merger Waves (2019)
Working Paper: Anticompetitive Vertical Merger Waves (2019)
Working Paper: Anticompetitive Vertical Merger Waves (2013)
Working Paper: Anticompetitive vertical mergers waves (2009)
Working Paper: Anticompetitive vertical mergers waves (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2019_084

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