Incentives for sabotage in vertically related industries

David Mandy () and David Sappington

Journal of Regulatory Economics, 2007, vol. 31, issue 3, 235-260

Abstract: We show that the incentives of a vertically integrated supplier to “sabotage” the activities of downstream rivals can vary with both the type of sabotage and the nature of downstream competition. Cost-increasing sabotage is typically profitable under both Cournot and Bertrand competition. In contrast, demand-reducing sabotage is often profitable under Cournot competition, but unprofitable under Bertrand competition. Incentives for sabotage can vary non-monotonically with the degree of product differentiation. Copyright Springer Science+Business Media, LLC 2007

Keywords: Regulation; Sabotage; Vertically integrated industries; L51; L10; L22 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11149-006-9015-7 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Incentives for Sabotage in Vertically Related Industries (2004)
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:kap:regeco:v:31:y:2007:i:3:p:235-260

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2

DOI: 10.1007/s11149-006-9015-7

Access Statistics for this article

Journal of Regulatory Economics is currently edited by Menaham Spiegel

More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().