Backward ownership, uniform pricing and entry deterrence

Arbeitspapier

Entry deterrence can occur when downstream incumbents hold non-controlling ownership shares of a supplier which is commited to charge uniform prices to all downstream firms. The ownership shares imply a rebate on the input price for the incumbents through the profit participation. Such backward ownership induces the supplier to accommodate entry by charging a low uniform price to all downstream firms in case of entry. However, just the entry-accommodating behavior reduces entry profits and thereby can lead to market foreclosure. Based on this theory, the article reviews a merger case in the financial services industry and draws conclusions for regulation and competition policy.

Angaben zum Objekt

• ISBN: 978-3-86304-249-3
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: DICE Discussion Paper ; No. 250

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance ; Firm Organization and Market Structure ; Antitrust Issues and Policies: General
• Thema: entry deterrence ; foreclosure ; minority shareholdings ; non-controlling partial ownership ; uniform pricing ; vertical integration

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Hunold, Matthias
• Ereignis: Veröffentlichung
• (wer): Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
• (wo): Düsseldorf
• (wann): 2017

Weitere Informationen

• Handle: http://hdl.handle.net/10419/158026
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ