IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v40y2019i1p119-124.html
   My bibliography  Save this article

Accommodation effects with downstream Cournot competition

Author

Listed:
  • Christos Constantatos
  • Ioannis N. Pinopoulos

Abstract

In a two‐tier industry where a vertically integrated firm sells input to and competes against a downstream rival, we show that, when the upstream division of the integrated firm chooses its input quantity, the downstream division credibly accommodates rival sales despite downstream competition being Cournot. Even taking rival quantity as given, the downstream division knows that, by limiting its own final‐good quantity, it can increase rival revenue, and therefore willingness‐to‐pay for the input. Upstream price setting leaves no room for downstream accommodating behavior implying that for a vertically integrated input monopolist, setting input price or input quantity makes crucial difference.

Suggested Citation

  • Christos Constantatos & Ioannis N. Pinopoulos, 2019. "Accommodation effects with downstream Cournot competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 40(1), pages 119-124, January.
    • Handle: RePEc:wly:mgtdec:v:40:y:2019:i:1:p:119-124
    DOI: 10.1002/mde.2987
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.2987
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.2987?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:40:y:2019:i:1:p:119-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.