Incentives for Sabotage in Vertically Related Industries

David Mandy () and David Sappington

No 404, Working Papers from Department of Economics, University of Missouri

Abstract: We show that the incentives a vertically integrated supplier may have to disadvantage or "sabotage" the activities of downstream rivals vary with both the type of sabotage and the nature of downstream competition. Cost-increasing sabotage is typically profitable under both Cournot and Bertrand competition. In contrast, demand-reducing sabotage is often profitable under Cournot competition, but unprofitable under Bertrand competition. Incentives for sabotage can vary non-monotonically with the degree of product differentiation.

Keywords: Regulation; Vertical Integration; Access Pricing; Sabotage (search for similar items in EconPapers)
JEL-codes: C1 (search for similar items in EconPapers)
Pages: 39 pgs.
Date: 2004-12-16, Revised 2004-12-16
New Economics Papers: this item is included in nep-com and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Forthcoming in Journal of Regulatory Economics (2006)

Downloads: (external link)
https://drive.google.com/file/d/1MYpb7tuQbyn-zUCLb ... 3bR/view?usp=sharing (application/pdf)

Related works:
Journal Article: Incentives for sabotage in vertically related industries (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:umc:wpaper:0404

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Missouri Contact information at EDIRC.
Bibliographic data for series maintained by Chao Gu ().