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Vertical mergers and downstream spatial competition with different product varieties

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  • Beladi, Hamid
  • Chakrabarti, Avik
  • Marjit, Sugata

Abstract

We show how, in an industry where no downstream firm can produce all varieties demanded, a vertical merger with a monopoly upstream will induce each downstream firm (inside and out of the merger) to deviate from the socially optimal location.

Suggested Citation

  • Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2008. "Vertical mergers and downstream spatial competition with different product varieties," Economics Letters, Elsevier, vol. 101(3), pages 262-264, December.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:262-264
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    References listed on IDEAS

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    1. Volker Nocke & Lucy White, 2007. "Do Vertical Mergers Facilitate Upstream Collusion?," American Economic Review, American Economic Association, vol. 97(4), pages 1321-1339, September.
    2. J. Peter Neary, 2007. "Cross-Border Mergers as Instruments of Comparative Advantage," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(4), pages 1229-1257.
    3. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    4. Braid, Ralph M., 2008. "Spatial price discrimination and the locations of firms with different product selections or product varieties," Economics Letters, Elsevier, vol. 98(3), pages 342-347, March.
    5. A. P. Lerner & H. W. Singer, 1937. "Some Notes on Duopoly and Spatial Competition," Journal of Political Economy, University of Chicago Press, vol. 45(2), pages 145-145.
    6. Partha Dasgupta & Eric Maskin, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, II: Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(1), pages 27-41.
    7. Edgar M. Hoover, 1937. "Spatial Price Discrimination," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(3), pages 182-191.
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    Cited by:

    1. Eleftheriou, Konstantinos & Michelacakis, Nickolas J. & Papavassiliou, Vassilios G., 2016. "Addendum to Eleftheriou and Michelacakis (2016)," Economics Letters, Elsevier, vol. 148(C), pages 53-54.
    2. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2015. "Vertical Mergers and Downstream Spatial Competition with Different Product Varieties, Revised and Corrected," MPRA Paper 68107, University Library of Munich, Germany.
    3. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Sequential spatial competition in vertically related industries with different product varieties," Economics Letters, Elsevier, vol. 106(2), pages 112-114, February.
    4. Beladi, Hamid & Chakrabarti, Avik & Hollas, Daniel, 2016. "A public firm in a vertically linked price discriminating spatial duopoly," Economic Systems, Elsevier, vol. 40(1), pages 59-63.
    5. Vettas, Nikolaos & Kourandi, Frago, 2010. "Endogenous Spatial Differentiation with Vertical Contracting," CEPR Discussion Papers 7948, C.E.P.R. Discussion Papers.
    6. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2010. "Cross-border merger, vertical structure, and spatial competition," Economics Letters, Elsevier, vol. 109(2), pages 112-114, November.
    7. Beladi, Hamid & Chakrabarti, Avik & Marjit, Sugata, 2014. "A public firm in a model of spatial duopoly with price discrimination," Economics Letters, Elsevier, vol. 123(1), pages 79-81.
    8. Eleftheriou, Konstantinos & Michelacakis, Nickolas, 2016. "A Comment on "Sequential Spatial Competition in Vertically Related Industries with Different Product Varieties"," MPRA Paper 73485, University Library of Munich, Germany.

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