First mover or second mover? Endogenous timing with partial vertical ownership

Qing Hu () and Tomomichi Mizuno
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Qing Hu: Kansai University

No 2513, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We investigate a vertically related market with a upstream firm offering inputs to two downstream firms. Considering the downstream firms hold partial vertical ownership of the upstream firm without control rights, we analyze the endogenous order for the downstream firms and find they may choose a more competitive competition, i.e., simultaneous pricing under Bertrand competition or sequential producing under Cournot competition. Our results happen when the degree of product substitutability is small and the degree of partial vertical ownership is high.

Pages: 21 pages
Date: 2025-04
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