Competitive foreclosure

• 成果类型: Article
• 署名作者: Burguet, Roberto; Sakovics, Jozsef
• 署名单位: State University System of Florida; University of Central Florida; University of Edinburgh
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12206
• 发表日期: 2017
• 页码: 906-926
• 关键词: MARKET-STRUCTURE; auctions; POWER; INNOVATION

摘要

We model oligopolistic firms, producing substitutes, who compete for inputs from capacity constrained suppliers in a decentralized market. Compared to a price-taking input market, the incentive to foreclose downstream competitors leads to higher input prices and to a higher aggregate amount of input acquired. This novel feature mitigates the output reducing effect of downstream market power and may even restore efficiency in the unique (input) market clearing equilibrium. Other equilibria, where firms coordinate on which suppliers to target, result in excess supply (involuntary unemployment, if input is labor) and even higher input prices. Our insights generalize to alternative vertical structures.