Upstream Horizontal Mergers, Bargaining and Vertical Contracts

Chrysovalantou Miliou and Emmanuel Petrakis
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Chrysovalantou Miliou: Department of Economics, Universidad Carlos III de Madrid, Calle Madrid 126, Getafe (Madrid)

No 509, Working Papers from University of Crete, Department of Economics

Abstract: Contrary to the seminal paper of Horn and Wolinsky (1988), we demonstrate that upstream firms, which sell their products to competing downstream firms, do not always have incentives to merge horizontally. In particular, we show that when bargaining takes place over two-part tariffs, and not over wholesale prices, upstream firms prefer to act as independent suppliers rather than as a monopolist supplier. Moreover, we show that horizontal mergers can be procompetitive, even in the absence of efficiency gains.

Keywords: horizontal mergers; bargaining; vertical relations; two-part tariffs; wholesale (search for similar items in EconPapers)
JEL-codes: L22 L41 L42 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-03
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:crt:wpaper:0509

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