Backward partial vertical integration through private placement
Autor(a) principal: | |
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Data de Publicação: | 2023 |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/42367 |
Resumo: | We analyze the market impact of a partial vertical integration whereby a subset of retail firms acquire, through a private placement operation, a non-controlling stake in the capital of an upstream firm, which supplies an essential input. In addition, we assume that this upstream firm can price discriminate between the retail firms which (now) own a stake in its capital and all of their retail rivals. We find that price discrimination is optimal and, compared to a vertical separation scenario, there is input foreclosure, a higher retail price, and lower social welfare, which suggests that, from a competition policy viewpoint, such partial vertical integrations should be analyzed with particular concern. On the other hand, incentives are such that conducting a private placement operation of the upstream firm’s capital yields gains from trade, and we are able to identify the optimal characteristics of such an operation. |
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Backward partial vertical integration through private placementInput foreclosurePartial vertical integrationPrice discriminationPrivate placementWe analyze the market impact of a partial vertical integration whereby a subset of retail firms acquire, through a private placement operation, a non-controlling stake in the capital of an upstream firm, which supplies an essential input. In addition, we assume that this upstream firm can price discriminate between the retail firms which (now) own a stake in its capital and all of their retail rivals. We find that price discrimination is optimal and, compared to a vertical separation scenario, there is input foreclosure, a higher retail price, and lower social welfare, which suggests that, from a competition policy viewpoint, such partial vertical integrations should be analyzed with particular concern. On the other hand, incentives are such that conducting a private placement operation of the upstream firm’s capital yields gains from trade, and we are able to identify the optimal characteristics of such an operation.Veritati - Repositório Institucional da Universidade Católica PortuguesaGonçalves, Ricardo2023-09-14T16:01:29Z2023-08-122023-08-12T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.14/42367eng1566-167910.1007/s10842-023-00403-485167804222001046958200001info: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:RCAAP2023-09-19T01:42:26Zoai:repositorio.ucp.pt:10400.14/42367Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T20:29:34.794365Repositório 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 |
Backward partial vertical integration through private placement |
title |
Backward partial vertical integration through private placement |
spellingShingle |
Backward partial vertical integration through private placement Gonçalves, Ricardo Input foreclosure Partial vertical integration Price discrimination Private placement |
title_short |
Backward partial vertical integration through private placement |
title_full |
Backward partial vertical integration through private placement |
title_fullStr |
Backward partial vertical integration through private placement |
title_full_unstemmed |
Backward partial vertical integration through private placement |
title_sort |
Backward partial vertical integration through private placement |
author |
Gonçalves, Ricardo |
author_facet |
Gonçalves, Ricardo |
author_role |
author |
dc.contributor.none.fl_str_mv |
Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Gonçalves, Ricardo |
dc.subject.por.fl_str_mv |
Input foreclosure Partial vertical integration Price discrimination Private placement |
topic |
Input foreclosure Partial vertical integration Price discrimination Private placement |
description |
We analyze the market impact of a partial vertical integration whereby a subset of retail firms acquire, through a private placement operation, a non-controlling stake in the capital of an upstream firm, which supplies an essential input. In addition, we assume that this upstream firm can price discriminate between the retail firms which (now) own a stake in its capital and all of their retail rivals. We find that price discrimination is optimal and, compared to a vertical separation scenario, there is input foreclosure, a higher retail price, and lower social welfare, which suggests that, from a competition policy viewpoint, such partial vertical integrations should be analyzed with particular concern. On the other hand, incentives are such that conducting a private placement operation of the upstream firm’s capital yields gains from trade, and we are able to identify the optimal characteristics of such an operation. |
publishDate |
2023 |
dc.date.none.fl_str_mv |
2023-09-14T16:01:29Z 2023-08-12 2023-08-12T00:00:00Z |
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/10400.14/42367 |
url |
http://hdl.handle.net/10400.14/42367 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
1566-1679 10.1007/s10842-023-00403-4 85167804222 001046958200001 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.source.none.fl_str_mv |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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