In this paper, a dominant supplier and competitive fringe supply goods to a common buyer who has private information about the state of demand. We give conditions under which market-share contracts are profitable, and we show that, in some cases, the full-information outcome can be obtained...

This paper demonstrates how a profitable, downstream merget can lower the merged entity's input price while raising that of its rivals, leading to an adverse effect on final consumers. This novel 'waterbed' result is surprising and very different to the unilateral and co-ordinated effects...