The entry incentives of complementary producers: A simple model with implications for antitrust policy

We model competition between two firms in an upstream-downstream relationship. Each firm can pay a sunk cost to enter the other's market. We show that coordination (e.g., through merger) can be anticompetitive, and that such coordination can arise in equilibrium.

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Year of publication:	2011
Authors:	Lleras, Juan S. ; Miller, Nathan H.
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 110.2011, 2, p. 147-150
Publisher:	Elsevier
Keywords:	Vertical mergers Entry incentives Complementary products

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008866923