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Bertrand-Cournot profit reversal in a vertical structure with cross ownership

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  • Mukherjee, Arijit
  • Wang, Leonard F.S.
  • Sun, Ji

Abstract

We provide a new reason for Bertrand-Cournot profit reversal. In a two-tier industry with a profit-maximising input supplier and symmetric final good producers, we show that the profit reversal occurs under passive cross ownership among firms.

Suggested Citation

  • Mukherjee, Arijit & Wang, Leonard F.S. & Sun, Ji, 2024. "Bertrand-Cournot profit reversal in a vertical structure with cross ownership," Economics Letters, Elsevier, vol. 238(C).
    • Handle: RePEc:eee:ecolet:v:238:y:2024:i:c:s0165176524001642
    DOI: 10.1016/j.econlet.2024.111681
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    References listed on IDEAS

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    More about this item

    Keywords

    Bertrand competition; Cournot competition; Cross ownership; Profit; Two-tier industry;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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