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Vertical Integration and Communication

Kenneth Arrow

Bell Journal of Economics, 1975, vol. 6, issue 1, 173-183

Abstract: Among the many possible motives for vertical integration, the one emphasized here is uncertainty in the supply of the upstream good and the consequent need for information by downstream firms. The basic conclusion is that, even when the initial conditions are of the type usually thought of as competitive, the upshot will be a tendency to imperfect competition.

Date: 1975
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