Skip to main content
SpringerLink
Log in

Vertical Market Participation

  • Published:
Review of Industrial Organization Aims and scope Submit manuscript

Abstract

Firms that operate at both levels of vertically related Cournot oligopolies will purchase some input supplies from independent rivals, even though they can produce the good at a lower cost, driving up input price for nonintegrated firms at the final good level. Foreclosure, which avoids this strategic behavior, yields better market performance than Cournot beliefs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Adams, Walter and Dirlam, Joel B. (1964) ‘Steel Imports and Vertical Oligopoly Power’, American Economic Review, 54(5), 626–655.

    Google Scholar 

  • Bolton, Patrick and Whinston, Michael D. (1991) ‘The “Foreclosure” Effect of Vertical Mergers’, Journal of Institutional and Theoretical Economics, 147, 207–226.

    Google Scholar 

  • Dowrick, Steve (1986) ‘von Stackelberg and Cournot Duopoly: Choosing Roles’, Rand Journal of Economics, 17(2), 251–260.

    Google Scholar 

  • Halonen, Maija (1994) ‘Vertical Supply, Foreclosure and Overbuying’, Helsinki School of Economics, Department of Economics, Discussion Papers No. 8, February 1994.

  • Hamilton, Jonathan H. and Slutsky, Steven M. (1990) ‘Endogenous Timing in Duopoly Games: Stackelberg or Cournot Equilibria’, Games and Economic Behavior, 2, 29–46.

    Google Scholar 

  • Ordover, Janusz A., Saloner, Garth and Salop, Steven C. (1990) ‘Equilibrium Vertical Foreclosure’, American Economic Review, 80(1), 127–142.

    Google Scholar 

  • Salinger, M.A. (1988) ‘Vertical Mergers and Market Foreclosure’, Quarterly Journal of Economics, 103(413), Issue 2, 345–356.

    Google Scholar 

  • Salop, Steven C. and Scheffman, David T. (1983) ‘“Raising Rivals” Costs’, American Economic Review, 73(2), 267–271.

    Google Scholar 

  • Salop, Steven C. and Scheffman, David T. (1987) ‘Cost-Raising Strategies’, Journal of Industrial Economics, 36(1), 19–34.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Economics Department, Bayerische Vereinsbank, KVW 3, D-80311, München, Germany

    Alexander Schrader

  2. Centre for Industrial Economics, University of Copenhagen, Studiestraede 6, 1455, Copenhagen K, Denmark

    Stephen Martin

Authors
  1. Alexander Schrader
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Stephen Martin
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Schrader, A., Martin, S. Vertical Market Participation. Review of Industrial Organization 13, 321–331 (1998). https://doi.org/10.1023/A:1007741508413

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1007741508413

Search

Navigation