Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52178
Buehler, Stefan; Schmutzler, Armin (2004). Asymmetric Vertical Integration. Working paper series / Socioeconomic Institute No. 306, University of Zurich.
We examine vertical backward integration in a reducedform model of successive oligopolies. Our key findings are: (i) There may be asymmetric equilibria where some firms integrate and others remain separated, even if firms are symmetric initially; (ii) Efficient firms are more likely to integrate vertically. As a result, integrated firms also tend to have a large market share. The driving force behind these findings are demand/mark-up complementarities in the product market. We also identify countervailing forces resulting from strong vertical foreclosure, upstream sales and endogenous acquisition costs.
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|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
|JEL Classification:||L13, L22, L40, L82|
|Deposited On:||29 Nov 2011 22:32|
|Last Modified:||09 Jul 2012 05:03|
|Series Name:||Working paper series / Socioeconomic Institute|
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