Simulating Mergers in a Vertical Supply Chain with Bargaining

Gloria Sheu and Charles Taragin
Additional contact information
Charles Taragin: U.S. Department of Justice

No 201703, EAG Discussions Papers from Department of Justice, Antitrust Division

Abstract: We model a two-level supply chain where Nash bargaining occurs upstream, while firms compete in a differentiated products logit setting downstream. The parameters of this model can be calibrated with a discrete set of data on prices, margins, and market shares. Using a series of numerical experiments, we illustrate how the model can simulate the outcome of both horizontal and vertical mergers. In addition, we extend the framework to allow for downstream competition via a second score auction.

Keywords: bargaining models; merger simulation; vertical markets (search for similar items in EconPapers)
JEL-codes: L13 L40 L41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2017-10
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Citations: View citations in EconPapers (8)

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Journal Article: Simulating mergers in a vertical supply chain with bargaining (2021)
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