Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76174
Authors: 
Buehler, Stefan
Schmutzler, Armin
Year of Publication: 
2004
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0306
Abstract: 
We examine vertical backward integration in a reducedform model of successive oligopolies. Our key findings are: (i) There may be asymmetric equilibria where some firms integrate and others remain separated, even if firms are symmetric initially; (ii) Efficient firms are more likely to integrate vertically. As a result, integrated firms also tend to have a large market share. The driving force behind these findings are demand/mark-up complementarities in the product market. We also identify countervailing forces resulting from strong vertical foreclosure, upstream sales and endogenous acquisition costs.
Subjects: 
successive oligopolies
vertical integration
efficiency
foreclosure
JEL: 
L13
L22
L40
L82
Document Type: 
Working Paper

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