search query: @author Salinger, M. A. / total: 2
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| Author: | Salinger, M. A. |
| Title: | Vertical mergers in multi-product industries and Edgeworth's paradox of taxation |
| Journal: | Journal of Industrial Economics
1991 : SEP, VOL. 39:5, p. 545-556 |
| Index terms: | MERGERS TAXATION PRICES WELFARE VERTICAL INTEGRATION |
| Language: | eng |
| Abstract: | When a two-product monopolist merges with one of its suppliers, thus eliminating the double marginalization for one of its goods, three qualitative effects on downstream prices can result. The monopolist might 1. lower both prices, 2. lower the price of the good for which the double marginalization is eliminated and raise the price of the other good, or 3. raise both prices. Since some and even all prices can increase, mergers of successive monopolists in multi-product industries do not necessarily improve welfare. This result differs from the single product case, in which such mergers necessarily increase welfare. The model provides a new insight into appropriate antitrust policy toward vertical mergers. |
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