eprintid: 50387
rev_number: 6
eprint_status: archive
userid: 1482
importid: 105
dir: disk0/00/05/03/87
datestamp: 2025-02-05 15:50:51
lastmod: 2025-02-05 15:51:06
status_changed: 2025-02-05 15:50:51
type: article
metadata_visibility: show
creators_name: Bisceglia, Michele
creators_name: Padilla, Jorge
creators_name: Piccolo, Salvatore
creators_name: Shekhar, Shiva
creators_idrefppn: 277010497
creators_affiliation: Toulouse School of Economics;Università degli studi di Bergamo
creators_affiliation: Compass Lexecon
creators_affiliation: Compass Lexecon;Università degli studi di Bergamo;CSEF
creators_affiliation: Compass Lexecon;University of Passau
creators_halaffid: 1002422
creators_halaffid: 308253
creators_halaffid: 308253 ;308253;86361
creators_halaffid: 1142611;98761
title: Vertical integration, innovation and foreclosure with competing ecosystems
ispublished: pub
subjects: subjects_ECO
abstract: We study the competitive effects of a vertical merger in a digital industry where an integrated incumbent (closed ecosystem) competes with an open ecosystem formed by an upstream supplier (ecosystem gatekeeper) and two downstream retailers selling differentiated products. Absent innovation, the incumbent sells a superior product compared to the rivals’ ones. Yet, the gatekeeper of the open ecosystem can fill up this gap by engaging in product innovation. We investigate the impact of vertical integration on the gatekeeper’s incentives to foreclose its non-integrated downstream unit and innovate its ecosystem to compete head-to-head with the incumbent. The vertically integrated gatekeeper raises the costs of the unintegrated competitor to relax intra-ecosystem competition but does not fully foreclose it as that would cause fiercer inter-ecosystem competition. Moreover, vertical integration enhances innovation within the open ecosystem, enabling its participants to catch up with the incumbent. Overall, vertical integration may benefit consumers even when it softens intra-ecosystem competition.
date: 2022-09
date_type: published
publisher: Elsevier
id_number: 10.1016/j.infoecopol.2022.100981
official_url: http://tse-fr.eu/pub/130288
faculty: tse
divisions: tse
keywords: Competing ecosystems
keywords: Foreclosure
keywords: Innovation
keywords: Vertical mergers
language: en
has_fulltext: FALSE
doi: 10.1016/j.infoecopol.2022.100981
subjectsJEL: JEL_L13
subjectsJEL: JEL_L23
subjectsJEL: JEL_L42
view_date_year: 2022
full_text_status: none
publication: Information Economics and Policy
volume: vol.60
place_of_pub: Amsterdam
refereed: TRUE
issn: 0167-6245
oai_identifier: oai:tse-fr.eu:130288
harvester_local_overwrite: number
harvester_local_overwrite: volume
harvester_local_overwrite: issn
harvester_local_overwrite: pending
harvester_local_overwrite: creators_idrefppn
harvester_local_overwrite: creators_halaffid
harvester_local_overwrite: publisher
harvester_local_overwrite: place_of_pub
harvester_local_overwrite: hal_id
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oai_lastmod: 2025-02-04T14:29:29Z
oai_set: tse
site: ut1
hal_id: hal-04931197
hal_passwd: u2tpkkt
hal_version: 1
hal_url: https://hal.science/hal-04931197
citation:   Bisceglia, Michele, Padilla, Jorge, Piccolo, SalvatoreIdRef <https://www.idref.fr/277010497> and Shekhar, Shiva  (2022) Vertical integration, innovation and foreclosure with competing ecosystems.    Information Economics and Policy, vol.60.