Market structure and the competitive effects of vertical integration

• 成果类型: Article
• 署名作者: Loertscher, Simon; Reisinger, Markus
• 署名单位: University of Melbourne; WHU - Otto Beisheim School of Management
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12058
• 发表日期: 2014
• 页码: 471-494
• 关键词: mergers; POWER; transmission

摘要

We analyze the competitive effects of backward vertical integration when firms exert market power upstream and compete in quantities downstream. Contrasting with previous literature, a small degree of vertical integration is always procompetitive because efficiency gains dominate foreclosure effects, and vertical integration even to full foreclosure can be procompetitive. Interestingly, vertical integration is more likely to be procompetitive if the industry is otherwise more concentrated. Extensions analyze welfare effects of integration and the incentives to integrate. Our analysis suggests that antitrust authorities should be wary of vertical integration when the integrating firm faces many competitors and should be permissive otherwise.