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Tomomichi Mizuno, Koki Arai, Chizuru Ikeda and Nobufumi Nishimura
''Vertical integration with fixed cost in an upstream market: NSK/Amatsuji merger''
( 2009, Vol. 29 No.3 )
In this paper, we discuss the case of the integration between NSK and Amatsuji Steel Ball by using the successive oligopoly model. We show that the integration does not lead to input foreclosure. However, it leads to customer foreclosure, if the fixed cost of a rival firm in the upstream market is high. Even in the case of customer foreclosure, since the integration reduces the final goods price, it is always beneficial for consumers.
Keywords: NSK/Amatsuji merger, Vertical integration, Foreclosure
JEL: L4 - Antitrust Issues and Policies: General
L1 - Market Structure, Firm Strategy, and Market Performance: General
Manuscript Received : Aug 11 2009 Manuscript Accepted : Sep 28 2009

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