On the pro-competitive effects of passive partial backward ownership

Maria Alipranti and Panagiotis Skartados
Authors registered in the RePEc Author Service: Emmanuel Petrakis

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: We consider a vertically related market in which an upstream monopolist supplier trades, via interim observable two-part tariff contracts, with two differentiated goods' downstream Cournot competitors. We show that passive partial backward ownership (PPBO) may be pro-competitive and welfare enhancing. PPBO exacerbates the upstream's commitment problem and yields lower wholesale prices, and higher industry output, consumers surplus, and welfare than in the absence of PPBO.

Keywords: Passive; Partial; Backward; Ownership; Vertical; Relations; Two-Part; Tariffs; Interim; Observable; Contracts (search for similar items in EconPapers)
JEL-codes: D43 L13 L14 (search for similar items in EconPapers)
Date: 2021-09-14
New Economics Papers: this item is included in nep-com, nep-cta, nep-ind, nep-isf and nep-reg
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Journal Article: On the pro-competitive effects of passive partial backward ownership (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:33271

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