Diagnosing Anticompetitive Effects of Vertical Integration by Multiproduct Firms

Fernando Luco () and Guillermo Marshall
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Fernando Luco: Texas A&M University

Review of Industrial Organization, 2021, vol. 59, issue 2, No 12, 392 pages

Abstract: Abstract The 2020 Vertical Merger Guidelines assume that the elimination of double marginalization caused by vertical integration is procompetitive. A body of research shows that this assumption may fail to hold in multiproduct industries. In this paper, we present a model of a vertical supply chain to analyze equilibrium effects of vertical integration, which we use to shed light on when an elimination of double marginalization may fail to be procompetitive in multiproduct industries. In particular, we discuss diversion ratios as a tool for diagnosing anticompetitive effects.

Keywords: Vertical integration; Multiproduct firms; Elimination of double marginalization; Diversion ratios (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11151-021-09823-0

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