Vertical Integration in the Presence of Upstream Competition

Catherine de Fontenay and Joshua Gans ()

RAND Journal of Economics, 2005, vol. 36, issue 3, pages 544-572

Abstract: We analyze vertical integration to compare outcomes under upstream competition and monopoly. This is done in a model based on the property rights approach to firm boundaries and where multilateral negotiations are modelled using a fully specified, noncooperative bargaining game. We demonstrate that vertical integration can alter the joint payoff of integrating parties in ex post bargaining; however, this bargaining effect is stronger for firms integrating under upstream competition than upstream monopoly. In contrast, where integration internalizes competitive externalities, ex post monopolization is more likely to occur under upstream monopoly than upstream competition. Ordering information: This article can be ordered from https://pubs3.rand.org/cgi-bin/rje/pdf.cgi.

Date: 2005
View citations in EconPapers

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Vertical Integration in the Presence of Upstream Competition (2004)
Working Paper: Vertical Integration in the Presence of Upstream Competition (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Series data maintained by ().