Targeting efforts to raise rivals' costs: Moving from “Whether” to “Whom”

David Mandy (), John Mayo and David Sappington

International Journal of Industrial Organization, 2016, vol. 46, issue C, 1-15

Abstract: Considerable attention has been devoted to determining when a vertically integrated provider (VIP) of an essential input will disadvantage its rivals anticompetitively. In contrast, little attention has been devoted to identifying which of its rivals a VIP will target for cost-raising activities. We identify industry and firm characteristics that render a particular rival a more likely target for a VIP's cost-raising activities. The potential for targeted “sabotage” introduces many subtleties, including the fact that a VIP typically prefers to sabotage an industry leader under retail quantity competition but an industry follower under price competition.

Keywords: Raising rivals' costs; Sabotage; Foreclosure; Targeting (search for similar items in EconPapers)
JEL-codes: L12 L4 L5 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:46:y:2016:i:c:p:1-15

DOI: 10.1016/j.ijindorg.2016.01.002

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