Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/202386 
Year of Publication: 
2009
Series/Report no.: 
EAG Discussion Paper No. EAG 09-7
Publisher: 
U.S. Department of Justice, Antitrust Division, Economic Analysis Group (EAG), Washington, DC
Abstract: 
We model competition between two firms in a vertical upstream-downstream relationship. Each firm can pay a sunk cost to enter the other’s market. For equilibria in which both firms enter, the downstream price can be lower than the joint profit maximizing level, and coordination (e.g., through merger) is anticompetitive.
Document Type: 
Working Paper

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