Bertrand competition in vertically related markets

Tomomichi Mizuno and Kazuhiro Takauchi

No 2208, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We build a successive Bertrand model with homogenous good. We show that increasing the pro- duction efficiency of upstream industry can reduce upstream Firms' profits. We also show that increasing the production efficiency of downstream industry may reduce downstream Firms' prof- its. Hence, an industrial policy that aims at improving production efficiency may be undesirable for Firms.

Pages: 12 pages
Date: 2022-04
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic and nep-reg
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