Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/885
Authors: 
Bickenbach, Frank
Williams, Iestyn
Year of Publication: 
1996
Series/Report no.: 
Kiel Working Paper 734
Abstract: 
In this paper we consider the impact of vertical integration on a retailer's choices of product variety and specific, brand-supporting investment. In an incomplete contract environment, vertical merger encourages investment in integrated supply, and foreclosure of non-integrated manufacturers. Anti-competitive as opposed to efficiency interpretations depend delicately on a trade-off between the benefits of supplier-specific rather than generally applicable retailer investment, and the value of multi-product rather than single product retailing. Where retailers compete, it is shown that vertical integration implements competition reducing, product differentiating investment strategies.
Subjects: 
incomplete contracts
vertical integration
monopolization
JEL: 
L22
L12
L4
Document Type: 
Working Paper

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