Forward Vertical Integration: The Fixed-Proportion Case Revisited

Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost-predation and the profits of the fringe may increase. The output price falls and welfare unambiguously rises.

MoreLess

Year of publication:	2007-10-05
Authors:	Bonroy, Olivier ; Larue, Bruno
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 12.2007, 25, p. 1-9
Publisher:	AccessEcon

More details

Extent:	application/pdf
Type of publication:	Article
Classification:	L2 - Firm Objectives, Organization, and Behavior
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010629307