Vertical Mergers and Downstream Spatial Competition with Different Product Varieties, Revised and Corrected

Eleftheriou, Konstantinos and Michelacakis, Nickolas (2015): Vertical Mergers and Downstream Spatial Competition with Different Product Varieties, Revised and Corrected.

Abstract

The aim of this paper is to revise and correct the results obtained in Beladi et al. [Beladi, H., Chakrabarti, A., Marjit, S., 2008. Vertical mergers and downstream spatial competition with different product varieties. Economics Letters 101, 262-264]. Specifically, we prove that in the pre-merger case, Nash equilibrium locations are socially optimal, whereas a vertical merger will relocate downstream firms by making them move to the right of their socially optimal positions while keeping their in-between distance intact.

• Item Type: MPRA Paper
• Language: English
• Keywords: Price discrimination; Spatial competition; Merger
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D43 - Oligopoly and Other Forms of Market Imperfection; L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L13 - Oligopoly and Other Imperfect Markets; L - Industrial Organization > L4 - Antitrust Issues and Policies > L42 - Vertical Restraints ; Resale Price Maintenance ; Quantity Discounts

References

Beladi, H., Chakrabarti, A., Marjit, S., 2008. Vertical mergers and downstream spatial competition with different product varieties. Economics Letters 101, 262-264.

Braid, R.M., 2008. Spatial price discrimination and the locations of firms with different product selections or product varieties. Economics Letters 98, 342-347.

Hotelling, H., 1929. Stability in competition. Economic Journal 39, 41-57.