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A Comment on "Sequential Spatial Competition in Vertically Related Industries with Different Product Varieties"

Eleftheriou, Konstantinos and Michelacakis, Nickolas (2016): A Comment on "Sequential Spatial Competition in Vertically Related Industries with Different Product Varieties".

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Abstract

The aim of this paper is to revise and correct the results obtained in Beladi et al. [Beladi, H., Chakrabarti, A., Marjit, S., 2010. Sequential spatial competition in vertically related industries with different product varieties. Economics Letters 106, 112-114]. Specifically, we prove that following a vertical merger, the downstream firms will locate away from the social optimum in the following manner: to the direction of the un-integrated follower or to a direction determined by the wholesale price charged to the un-integrated leader.

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