Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93874
Authors: 
Hombert, Johan
Pouyet, Jérôme
Schutz, Nicolas
Year of Publication: 
2013
Series/Report no.: 
SFB/TR 15 Discussion Paper 440
Abstract: 
We develop a model of vertical merger waves leading to input foreclosure. When all upstream firms become vertically integrated, the input price can increase substantially above marginal cost despite Bertrand competition in the input market. Input foreclosure is easiest to sustain when upstream market shares are the most asymmetric (monopoly-like equilibria) or the most symmetric (collusive-like equilibria). In addition, these equilibria are more likely when (i) mergers generate strong synergies; (ii) price discrimination in the input market is not allowed; (iii) contracts are public; whereas (iv) the impact of upstream and downstream industry concentration is ambiguous.
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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