Who Integrates?

Armin Schmutzler and Bühler, Stefan
Authors registered in the RePEc Author Service: Stefan Buehler

No 4066, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We examine vertical backward integration in oligopoly. Analysing a standard linear Cournot model, we find that for wide parameter ranges (i) some firms integrate, while others remain separated, and (ii) efficient firms are more likely to integrate vertically. Adopting a reduced-form approach, we identify a wholesale price effect and demand/mark-up complementarities as the driving forces for our results. We show that our results generalize beyond the Cournot example under fairly natural assumptions.

Keywords: Vertically-related oligopolies; Vertical integration; Efficiency; Foreclosure (search for similar items in EconPapers)
JEL-codes: L13 L22 L40 L82 (search for similar items in EconPapers)
Date: 2003-09
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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