A Note on the Efficiency Gains from a Refusal to Deal in a Bertrand-Nash Framework

Nadimi Soheil R. () and Weisman Dennis L. ()
Additional contact information
Nadimi Soheil R.: Department of Economics, Kansas State University, Waters Hall, Manhattan, KS, 66506-4001, USA
Weisman Dennis L.: Department of Economics, Kansas State University, Waters Hall, Manhattan, KS, 66506-4001, USA

The B.E. Journal of Economic Analysis & Policy, 2020, vol. 20, issue 4, 12

Abstract: A vertically integrated provider (VIP) initially has a duty to deal with a rival at unregulated upstream and downstream prices in a Bertrand-Nash framework. The duty to deal is subsequently terminated which enables the VIP to acquire the rival and serve as a two-product, downstream monopolist. We find that the refusal to deal is efficiency-enhancing, given that prices decrease while profits increase ex post.

Keywords: vertical integration; duty to deal; efficiency; antitrust (search for similar items in EconPapers)
JEL-codes: L51 L96 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/bejeap-2020-0070 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejeap:v:20:y:2020:i:4:p:12:n:4

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/bejeap/html

DOI: 10.1515/bejeap-2020-0070

Access Statistics for this article

The B.E. Journal of Economic Analysis & Policy is currently edited by Hendrik Jürges and Sandra Ludwig

More articles in The B.E. Journal of Economic Analysis & Policy from De Gruyter
Bibliographic data for series maintained by Peter Golla ().