Forward Vertical Integration: The Fixed-Proportion Case Revisited

Olivier Bonroy () and Bruno Larue ()
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Bruno Larue: CRÉA , Laval University

Economics Bulletin, 2007, vol. 12, issue 25, pages 1-9

Abstract: Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost-predation and the profits of the fringe may increase. The output price falls and welfare unambiguously rises.

Keywords: cost asymmetries; cost-predation; Vertical integration (search for similar items in EconPapers)
JEL-codes: L2 (search for similar items in EconPapers)
Date: 2007-10-05
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Working Paper: Forward Vertical Integration: The Fixed-Proportion Case Revisited (2006)
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