Bonroy, Olivier and Larue, Bruno (2006): Forward Vertical Integration: The Fixed-Proportion Case Revisited. Unpublished.
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Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost predation and the fringe firms’ margin may even increase. The output price falls and welfare unambiguously rises.
| Item Type: | MPRA Paper |
|---|---|
| Language: | English |
| Keywords: | Vertical integration; cost predation; cost asymmetries |
| Subjects: | L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration; Conglomerates; Subsidiaries |
| ID Code: | 65 |
| Deposited By: | Olivier Bonroy |
| Deposited On: | 05. Oct 2006 |
| Last Modified: | 25. Jul 2011 16:21 |
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