Bertrand-Cournot profit reversal in a vertical structure with cross ownership

Arijit Mukherjee, Leonard F.S. Wang and Ji Sun

Economics Letters, 2024, vol. 238, issue C

Abstract: We provide a new reason for Bertrand-Cournot profit reversal. In a two-tier industry with a profit-maximising input supplier and symmetric final good producers, we show that the profit reversal occurs under passive cross ownership among firms.

Keywords: Bertrand competition; Cournot competition; Cross ownership; Profit; Two-tier industry (search for similar items in EconPapers)
JEL-codes: D43 L10 L13 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524001642

DOI: 10.1016/j.econlet.2024.111681

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