Autore
Schrader, Alexander

Titolo
Vertical mergers and market foreclosure: comment
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1994 - Fascicolo: 24 - Pagina iniziale: 1 - Pagina finale: 17

This paper shows that the general foreclosure result claimed by Salinger in his 1988 Qje article is incorrect. Extending Salinger’s model, I develop a twostage game form and derive explicit conditions for integrated firms to supply or foreclose the intermediate good market. The emergence of either the foreclosure or vertical supply equilibrium is endogenous. It depends on the number of integrated firms and unintegrated upstream and downstream firms. Foreclosure arises in duopoly cases and is also supported by a small number of downstream firms and a large number of upstream firms. Vertical supply, on the other hand, is admissible for a broad range of parameter values and is supported by a large number of downstream firms and a low number of upstream firms.



Testo completo: http://hdl.handle.net/1814/503

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