search query: @indexterm EQUILIBRIUM ANALYSIS / total: 508
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| Author: | Bourreau, M. (et. al) |
| Title: | Upstream competition between vertically integrated firms |
| Journal: | Journal of Industrial Economics
2011 : DEC, VOL 59:4 p. 677-713 |
| Index terms: | competition wholesaling direct costing equilibrium analysis |
| Freeterms: | economic models |
| Language: | eng |
| Abstract: | A model of two-tier competition between vertically integrated companies and unintegrated downstream ones is proposed. We show that, even when integrated firms engage in price competition to offer a homogeneous input, the Bertrand logic could collapse, and the input price may lie above marginal cost in equilibrium. These partial foreclosure equilibria more likely exist in the cases, where downstream competition is fierce or when unintegrated downstream competitors are fairly inefficient. The impact of several regulatory tools on the competitiveness of the wholesale market is discussed. |
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