Vertical Mergers and Market Foreclosure

Michael Salinger

The Quarterly Journal of Economics, 1988, vol. 103, issue 2, 345-356

Abstract: yThe model in this paper illustrates three effects of vertical mergers when both stages are oligopolistic and vertically integrated and unintegrated producers coexist. First, the merging firm increases its final good output. Second, the resulting backward shift in the residual demand curve facing unintegrated final good producers ylowers their demand for the intermediate good. Third, the merged firm withdraws from the intermediate good market. The increased concentration pushes the intermediate good price upward. Which effect dominates depends on market structure. Under some conditions, a vertical merger causes the price of the final good to increase.

Date: 1988
References: Add references at CitEc
Citations: View citations in EconPapers (355)

Downloads: (external link)
http://hdl.handle.net/10.2307/1885117 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
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:oup:qjecon:v:103:y:1988:i:2:p:345-356.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().