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Incentive to encourage downstream competition under bilateral oligopoly
[[Incitation d'une firme amont à favoriser la concurrence en aval dans le cadre d'un oligopole bilatéral]]

Author

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  • Stéphane Caprice

    (Station d'économie et sociologie rurales - INRA - Institut National de la Recherche Agronomique)

Abstract

Consider the contracting problem of an input supplier dealing with several firms that compete in an output market. We show that, contrary to the key result of the previous literature, an input supplier's profit can increase with the number of downstream firms if the upstream firm is not a monopolist but instead competes with an alternative inferior supplier.

Suggested Citation

  • Stéphane Caprice, 2005. "Incentive to encourage downstream competition under bilateral oligopoly [[Incitation d'une firme amont à favoriser la concurrence en aval dans le cadre d'un oligopole bilatéral]]," Post-Print hal-02676111, HAL.
    • Handle: RePEc:hal:journl:hal-02676111
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02676111
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    References listed on IDEAS

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    5. Gilles Chemla & Gilles Chemla, 2003. "Downstream Competition, Foreclosure and Vertical Integration," Post-Print halshs-00679847, HAL.
    6. Patrick Rey & Thibaud Vergé, 2004. "Bilateral Control with Vertical Contracts," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 728-746, Winter.
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    8. Ilya Segal & Michael D. Whinston, 2003. "Robust Predictions for Bilateral Contracting with Externalities," Econometrica, Econometric Society, vol. 71(3), pages 757-791, May.
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    Cited by:

    1. Ramon Fauli-Oller & Joel Sandonis, 2016. "Welfare Effects Of Downstream Mergers And Upstream Market Concentration," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(05), pages 1-16, December.
    2. Ramon Faulí‐Oller & Joel Sandonís & Juana Santamaría, 2011. "Downstream Mergers And Upstream Investment," Manchester School, University of Manchester, vol. 79(4), pages 884-898, July.
    3. Yamada, Mai, 2016. "The Optimal Trading Partner for an Upstream Monopolist," MPRA Paper 70325, University Library of Munich, Germany.
    4. repec:ebl:ecbull:v:12:y:2008:i:3:p:1-7 is not listed on IDEAS
    5. Joel Sandonís & Javier M. López-Cuñat, 2018. "Upstream Incentives To Encourage Downstream Competition In A Vertically Separated Industry," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(03), pages 619-627, June.
    6. Ramón Faulí-Oller & Joel Sandonís, 2007. "Downstream Mergers And Entry," Working Papers. Serie AD 2007-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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