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Vertical integration and right of first refusal

Author

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  • Cabral, Luís
  • Vasconcelos, Hélder

Abstract

We consider a partially integrated industry and examine the effects of contracts with a right of first refusal, whereby the vertically integrated firm has the option to match a quote from an independent supplier to supply an independent downstream firm.

Suggested Citation

  • Cabral, Luís & Vasconcelos, Hélder, 2011. "Vertical integration and right of first refusal," Economics Letters, Elsevier, vol. 113(1), pages 50-53, October.
    • Handle: RePEc:eee:ecolet:v:113:y:2011:i:1:p:50-53
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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. Eric Maskin & John Riley, 2000. "Asymmetric Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 413-438.
    3. Chen, Yongmin, 2001. "On Vertical Mergers and Their Competitive Effects," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 667-685, Winter.
    4. Lee, Joon-Suk, 2008. "Favoritism in asymmetric procurement auctions," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1407-1424, November.
    5. Alberto Salvo, 2010. "Inferring market power under the threat of entry: the case of the Brazilian cement industry," RAND Journal of Economics, RAND Corporation, vol. 41(2), pages 326-350, June.
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    Cited by:

    1. Fabio Pieri, 2015. "Vertical organization of production and firm growth behavior," Working Papers 1508, Department of Applied Economics II, Universidad de Valencia.
    2. Fabio Pieri, 2018. "Vertical organization of production and firm growth," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(1), pages 83-106.
    3. Luca Sandrini, 2019. "Incentives for labor-augmenting innovation: The role of wage rate," "Marco Fanno" Working Papers 0232, Dipartimento di Scienze Economiche "Marco Fanno".

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