A Comment on ‘Buyers' Miscoordination, Entry and Downstream Competition

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The Economic Journal, 2025, vol. 135, issue 670, 2083-2088

Abstract: Fumagalli and Motta (The Economic Journal, 2008) argued that competition among downstream buyers limits the ability of a dominant upstream firm to deter entry by a more efficient competitor. This comment demonstrates that the impact of downstream competition is, in fact, more complex. In particular, competition can motivate buyers to favour the incumbent due to a ‘raising rivals’ cost’ effect.

Date: 2025
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