Forward vertical integration: the fixed-proportion case revisited

Olivier Bonroy and Bruno Larue
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Bruno Larue: ULaval - Université Laval [Québec]

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Abstract: Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost-predation and the profits of the fringe may increase. The output price falls and welfare unambiguously rises.

Keywords: VERTICAL INTEGRATION; COST ASYMETRY; COST PREDATION; ASYMETRIE DES COUTS (search for similar items in EconPapers)
Date: 2007
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Published in Economics Bulletin, 2007, 12 (25), pp.1-9

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Related works:
Journal Article: Forward Vertical Integration: The Fixed-Proportion Case Revisited (2007)
Working Paper: Forward Vertical Integration: The Fixed-Proportion Case Revisited (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02653842

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