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A Model of Vertical Oligopolistic Competition

Markus Reisinger and Monika Schnitzer ()

Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems from Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich

Abstract: This paper develops a model of successive oligopolies with endogenous market entry, allowing for varying degrees of product differentiation and entry costs in both markets. Our analysis shows that the downstream conditions dominate the overall profitability of the two-tier structure while the upstream conditions mainly affect the distribution of profits. We compare the welfare effects of upstream versus downstream deregulation policies and show that the impact of deregulation may be overvalued when ignoring feedback effects from the other market. Furthermore, we analyze how different forms of vertical restraints influence the endogenous market structure and show when they are welfare enhancing.

Keywords: Deregulation; Free Entry; Price Competition; Product Differentiation; Successive Oligopolies; Two-Part Tariffs; Vertical Restraints (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 L50 (search for similar items in EconPapers)
Date: 2008-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-mic and nep-reg
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https://epub.ub.uni-muenchen.de/13324/1/228.pdf (application/pdf)

Related works:
Working Paper: A Model of Vertical Oligopolistic Competition (2008) Downloads
Working Paper: A Model of Vertical Oligopolistic Competition (2008) Downloads
Working Paper: A Model of Vertical Oligopolistic Competition (2008) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:trf:wpaper:228

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