Successive Monopolies with Endogenous Quality

Hans Zenger

MPRA Paper from University Library of Munich, Germany

Abstract: This paper analyzes the impact of vertical integration on product quality. Contrary to previous findings, it is shown that integration decreases quality in many natural situations. In general, the direction of the quality change is governed by three effects that are isolated in the model. This separation allows an analysis of important special cases like the manufacturer/retailer relationship, the intermediate/final good producer relationship, the deregulation of network infrastructure, and the provision of promotional services through independent distributors.

Keywords: Vertical integration; double marginalization; quality (search for similar items in EconPapers)
JEL-codes: D4 L12 L15 L22 (search for similar items in EconPapers)
Date: 2009-05-03
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:15659

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