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Allain, Marie-Laure
, Rey, Patrick and Chambolle, Claire
(2016)
Vertical Integration as a Source of Hold-up.
Review of Economic Studies, vol. 83 (n° 1).
pp. 1-25.
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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: | Article |
|---|---|
| Language: | English |
| Date: | January 2016 |
| Refereed: | Yes |
| 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) |
| Site: | UT1 |
| Date Deposited: | 13 May 2016 12:16 |
| Last Modified: | 29 Jun 2021 08:57 |
| OAI Identifier: | oai:tse-fr.eu:30451 |
| URI: | https://publications.ut-capitole.fr/id/eprint/21681 |
Available Versions of this Item
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Vertical Integration as a Source of Hold-up. (deposited 16 Mar 2015 14:50)
- Vertical Integration as a Source of Hold-up. (deposited 13 May 2016 12:16) [Currently Displayed]
