Vertical integration with fixed cost in an upstream market: NSK/Amatsuji merger

In this paper, we discuss the case of the integration between NSK and Amatsuji Steel Ball by using the successive oligopoly model. We show that the integration does not lead to input foreclosure. However, it leads to customer foreclosure, if the fixed cost of a rival firm in the upstream market is high. Even in the case of customer foreclosure, since the integration reduces the final goods price, it is always beneficial for consumers.

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Year of publication:	2009
Authors:	Mizuno, Tomomichi ; Arai, Koki ; Ikeda, Chizuru ; Nishimura, Nobufumi
Published in:	Economics Bulletin. - AccessEcon, ISSN 1545-2921. - Vol. 29.2009, 3, p. 2438-2448
Publisher:	AccessEcon
Subject:	NSK/Amatsuji merger \| Vertical integration \| Foreclosure

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Extent:	application/pdf
Type of publication:	Article
Language:	English
Classification:	L4 - Antitrust Policy ; L1 - Market Structure, Firm Strategy, and Market Performance
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008562793