A Model of Vertical Oligopolistic Competition

Monika Schnitzer () and Markus Reisinger

No 6730, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper develops a model of successive oligopolies with endogenous market entry, allowing for varying degrees of product differentiation and entry costs in both markets. Our analysis shows that the downstream conditions dominate the overall profitability of the two-tier structure while the upstream conditions mainly affect the distribution of profits. We compare the welfare effects of upstream versus downstream deregulation policies and show that the impact of deregulation may be overvalued when ignoring feedback effects from the other market. Furthermore, we analyze how different forms of vertical restraints influence the endogenous market structure and show when they are welfare enhancing.

Keywords: Deregulation; Free entry; Price competition; Product differentiation; Successive oligopolies; Two-part tariffs; Vertical restraints (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 L50 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: A Model of Vertical Oligopolistic Competition (2008)
Working Paper: A Model of Vertical Oligopolistic Competition (2008)
Working Paper: A Model of Vertical Oligopolistic Competition (2008)
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