Vertical integration, market foreclosure and quality investment

Detalhes bibliográficos
Autor(a) principal: Hernán González, Roberto
Data de Publicação: 2012
Outros Autores: Kujal, Praveen
Tipo de documento: Artigo
Idioma: eng
Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
Texto Completo: http://hdl.handle.net/10400.5/15677
Resumo: We study incentives to vertically integrate in an industry with verti- cally differentiated downstream firms. Vertical integration by one of the firms increases production costs for the rival. Increased production costs negatively affects quality investment both by the integrated firm and the unintegrated rival. Quality investment by both firms decreases under any (vertical inte- gration) scenario. The decrease in quality invesment by both firms softens competition among downstream firms. By integrating first, a firm always produces the high quality good and earns higher profits. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration.
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spelling Vertical integration, market foreclosure and quality investmentVertical integrationQuality investmentMarket powerProduct differentiationWe study incentives to vertically integrate in an industry with verti- cally differentiated downstream firms. Vertical integration by one of the firms increases production costs for the rival. Increased production costs negatively affects quality investment both by the integrated firm and the unintegrated rival. Quality investment by both firms decreases under any (vertical inte- gration) scenario. The decrease in quality invesment by both firms softens competition among downstream firms. By integrating first, a firm always produces the high quality good and earns higher profits. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration.Springer VerlagRepositório da Universidade de LisboaHernán González, RobertoKujal, Praveen2018-06-21T12:44:01Z2012-042012-04-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/15677engHernán González, Roberto e Praveen Kujal (2012). "Vertical integration, market foreclosure and quality investment". Portuguese Economic Journal, 11(1):1-201617-982X (print)10.1007/s10258-011-0074-zmetadata only accessinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-03-12T01:31:02Zoai:www.repository.utl.pt:10400.5/15677Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:01:17.698275Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse
dc.title.none.fl_str_mv Vertical integration, market foreclosure and quality investment
title Vertical integration, market foreclosure and quality investment
spellingShingle Vertical integration, market foreclosure and quality investment
Hernán González, Roberto
Vertical integration
Quality investment
Market power
Product differentiation
title_short Vertical integration, market foreclosure and quality investment
title_full Vertical integration, market foreclosure and quality investment
title_fullStr Vertical integration, market foreclosure and quality investment
title_full_unstemmed Vertical integration, market foreclosure and quality investment
title_sort Vertical integration, market foreclosure and quality investment
author Hernán González, Roberto
author_facet Hernán González, Roberto
Kujal, Praveen
author_role author
author2 Kujal, Praveen
author2_role author
dc.contributor.none.fl_str_mv Repositório da Universidade de Lisboa
dc.contributor.author.fl_str_mv Hernán González, Roberto
Kujal, Praveen
dc.subject.por.fl_str_mv Vertical integration
Quality investment
Market power
Product differentiation
topic Vertical integration
Quality investment
Market power
Product differentiation
description We study incentives to vertically integrate in an industry with verti- cally differentiated downstream firms. Vertical integration by one of the firms increases production costs for the rival. Increased production costs negatively affects quality investment both by the integrated firm and the unintegrated rival. Quality investment by both firms decreases under any (vertical inte- gration) scenario. The decrease in quality invesment by both firms softens competition among downstream firms. By integrating first, a firm always produces the high quality good and earns higher profits. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration.
publishDate 2012
dc.date.none.fl_str_mv 2012-04
2012-04-01T00:00:00Z
2018-06-21T12:44:01Z
dc.type.status.fl_str_mv info:eu-repo/semantics/publishedVersion
dc.type.driver.fl_str_mv info:eu-repo/semantics/article
format article
status_str publishedVersion
dc.identifier.uri.fl_str_mv http://hdl.handle.net/10400.5/15677
url http://hdl.handle.net/10400.5/15677
dc.language.iso.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv Hernán González, Roberto e Praveen Kujal (2012). "Vertical integration, market foreclosure and quality investment". Portuguese Economic Journal, 11(1):1-20
1617-982X (print)
10.1007/s10258-011-0074-z
dc.rights.driver.fl_str_mv metadata only access
info:eu-repo/semantics/openAccess
rights_invalid_str_mv metadata only access
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Springer Verlag
publisher.none.fl_str_mv Springer Verlag
dc.source.none.fl_str_mv reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron:RCAAP
instname_str Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
instacron_str RCAAP
institution RCAAP
reponame_str Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
collection Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
repository.name.fl_str_mv Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação
repository.mail.fl_str_mv
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