Hamilton, Stephen F., Bontems, Philippe and Lepore, Jason (2015) Oligopoly Intermediation, Relative Rivalry, and market conduct. International Journal of Industrial Organization, vol.40. pp. 49-59.

Abstract

We consider two firms that compete against each other jointly in upstreamand downstream markets under two pricing games: Purchasing to stock (PTS), in which firms select input prices prior to setting consumer prices; and purchasing to order (PTO), in which firms sell forward contracts to consumers prior to selecting input prices. The antitrust implications of the model depend on the relative degree of oligopoly rivalry in the upstream and downstream markets. Firms strategically precommit to setting prices in the less rivalrous market,which serves to soften competition in the more rivalrous market, resulting in anticompetitive effects. Bertrand prices emerge in equilibrium when the markets are equally rivalrous, while Cournot outcomes arise with upstream monopsony or downstream monopoly markets. The slope of firm reaction functions depends on relative rivalry, a feature we use to derive testable hypotheses for antitrust analysis of a wide variety of industry practices.

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• Oligopoly Intermediation, Relative Rivalry, and the Mode of Competition. (deposited 09 Jul 2014 17:41)
  • Oligopoly Intermediation, Relative Rivalry, and market conduct. (deposited 21 Sep 2015 13:08) [Currently Displayed]