Horizontal concentration and vertical relationships / Concentration horizontale et relations verticales

Marie-Laure Allain and Saïd Souam ()

Annals of Economics and Statistics, 2006, issue 82, 103-127

Abstract: This paper studies horizontal mergers in vertically related markets. In a two-level Cournot model, with an intermediate and a final market, we show that downstream mergers inducing size effects are, ceteris paribus, more profitable than upstream ones. Moreover, a merger at one level reduces the incentives to merge at the other level. Endogenizing the firms' decisions to merge by considering a merger game supports the previous results.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2006:i:82:p:103-127

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