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The Entry Incentives of Complementary Producers: A Simple Model with Implications for Antitrust Policy

We model competition between two firms in a vertical upstream-downstream relationship. Each firm can pay a sunk cost to enter the other’s market. For equilibria in which both firms enter, the downstream price can be lower than the joint profit maximizing level, and coordination (e.g., through merger) is anticompetitive.
Year of publication:
2009-11
Authors: Lleras, Juan S. ; Miller, Nathan H.
Institutions: Antitrust Division, Department of Justice
Extent:
application/pdf
Series:
Type of publication: Book / Working Paper
Language: English
Notes:
Number 200907 8 pages
Source:
Persistent link: https://www.econbiz.de/10008542281
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