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Allain, Marie-Laure
, Rey, Patrick and Chambolle, Claire
(2014)
Vertical Integration as a Source of Hold-up.
TSE Working Paper, n. 14-525, Toulouse
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Abstract
While vertical integration is traditionally seen as a solution to the hold-up problem, this paper highlights instead that it can generate hold-up problems — for rivals. We first consider a successive duopoly where competition among suppliers eliminates any risk of hold-up; downstreamfirms thus obtain the full return from their investments. We then show that vertical integration creates hold-up concerns for the downstream rival, by affecting the integrated supplier’s incentives from both ex ante and ex post standpoints. We also provide illustrations in terms of standard industrial organization models and of antitrust cases, and discuss the robustness of the insights.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | September 2014 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Vertical Integration, Hold-up, Incomplete contracts, Vertical foreclosure |
| JEL Classification: | L13 - Oligopoly and Other Imperfect Markets L41 - Monopolization; Horizontal Anticompetitive Practices L42 - Vertical Restraints; Resale Price Maintenance; Quantity Discounts |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 16 Mar 2015 14:50 |
| Last Modified: | 02 Apr 2021 15:49 |
| OAI Identifier: | oai:tse-fr.eu:28511 |
| URI: | https://publications.ut-capitole.fr/id/eprint/16583 |
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