Autori
Motta, Massimo
Fumagalli, Chiara

Titolo
Upstream mergers, downstream mergers, and secret vertical contracts
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1999 - Fascicolo: 38 - Pagina iniziale: 1 - Pagina finale: 24

In an industry characterised by secret vertical contracts, we consider a benchmark case where two vertical chains exist, with two upstream man-ufacturers selling to two downstream retailers, and show that thè equi-librium prices are independent of whether upstream or downstream firms have ali thè bargaining power. We then analyse two alternative mergers, and show that a downstream merger (which gives thè downstream monopolist ali thè bargaining power) is more welfare detrimental than an upstream merger (which gives thè bargaining power to thè upstream monopolist). We also show that downstream and upstream mergers have thè sanie effects when contracts are observable.



Testo completo: http://www.iue.it/ECO/WP-Texts/ECO99-38.pdf

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