Some Simple Analytics of Vertically Linked Markets

Joseph Farrell ()

Review of Industrial Organization, 2017, vol. 50, issue 4, No 4, 440 pages

Abstract: Abstract A firm may have an incentive to encourage competition and/or efficiency in an “aftermarket” that is vertically linked to a “foremarket” in which it participates. I describe a strong form of this potential incentive, and then explore how it is weakened in plausible circumstances. Some applications to net neutrality are described.

Keywords: Aftermarkets; Vertical incentives; Drip pricing; Waterbed (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11151-017-9571-2

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