Investment specificity, vertical integration and market foreclosure

Arbeitspapier

In this paper we consider the impact of vertical integration on a retailer's choices of product variety and specific, brand-supporting investment. In an incomplete contract environment, vertical merger encourages investment in integrated supply, and foreclosure of non-integrated manufacturers. Anti-competitive as opposed to efficiency interpretations depend delicately on a trade-off between the benefits of supplier-specific rather than generally applicable retailer investment, and the value of multi-product rather than single product retailing. Where retailers compete, it is shown that vertical integration implements competition reducing, product differentiating investment strategies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Year: 1996 ; Kiel: Institut für Weltwirtschaft (IfW)

Classification and Topics

• Classification: Wirtschaft ; Firm Organization and Market Structure ; Monopoly; Monopolization Strategies
• Subject: incomplete contracts ; vertical integration ; monopolization ; Vertikale Konzentration ; Unvollständiger Vertrag ; Einzelhandel ; Sortiment ; Wettbewerbstheorie ; Wirtschaftliche Effizienz ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bickenbach, Frank ; Williams, Iestyn
• Event: Veröffentlichung
• (who): Kiel Institute of World Economics (IfW) ; ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
• (where): Kiel
• (when): 1996

Further information

• Handle: http://hdl.handle.net/10419/885
• Last update: 10.03.2025, 11:43 AM CET