|
| |
| Olivier Bonroy and Bruno Larue |
| |
| ''Forward Vertical Integration: The Fixed-Proportion Case Revisited'' |
| ( 2007, Vol. 12 No.25 ) |
| |
| |
| Assuming a fixed-proportion downstream production technology, partial forward integration by an upstream monopolist may be observed whether the monopolist is advantaged or disadvantaged cost-wise relative to fringe firms in the downstream market. Integration need not induce cost-predation and the profits of the fringe may increase. The output price falls and welfare unambiguously rises. |
| |
| |
| Keywords: |
JEL: L2 - Firm Objectives, Organization, and Behavior: General
|
| |
| Manuscript Received : Sep 06 2007 | | Manuscript Accepted : Oct 05 2007 |
|
