Price Discrimination and Forward Integration

Martin K. Perry

Bell Journal of Economics, 1978, vol. 9, issue 1, 209-217

Abstract: An input monopolist could price discriminate among all downstream industries by integrating into all but the one with the most inelastic derived demand. We demonstrate that a dominant firm will have a similar incentive to integrate into industries with more elastic derived demands. However, the extent of the fringe of competitive input suppliers will determine the number of such industries into which integration can profitability be maintained.

Date: 1978
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