Arbeitspapier
Downstream investment in oligopoly
We examine cost-reducing investment in vertically-related oligopolies, where firms may be vertically integrated or separated. Analyzing a standard linear Cournot model, we show that: (i) Integrated firms invest more than separated competitors. (ii) Vertical integration increases own investment and decreases competitor investment. (iii) Firms may integrate strategically so as to preempt investments by competitors. Adopting a reduced-form approach, we identify demand/mark-up complementarities in the product market as the driving force for these results. We show that our results generalize naturally beyond the Cournot example, and we discuss policy implications.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 0310
- Klassifikation
-
Wirtschaft
Oligopoly and Other Imperfect Markets
Firm Organization and Market Structure
Antitrust Issues and Policies: General
Entertainment; Media
- Thema
-
vertically-related oligopolies
investments
vertical integration
cost reduction
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Buehler, Stefan
Schmutzler, Armin
- Ereignis
-
Veröffentlichung
- (wer)
-
University of Zurich, Socioeconomic Institute
- (wo)
-
Zurich
- (wann)
-
2003
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Buehler, Stefan
- Schmutzler, Armin
- University of Zurich, Socioeconomic Institute
Entstanden
- 2003
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