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Title: Wel-fare-improving Vertical Mergers in the Presence of Downstream Product Differentiation
Authors: 李文傑
Lee, Wen-Chieh
Wen, Wei-Jen
Huang, Wen-Hsien
Contributors: 經濟系
Keywords: Vertical merger;Downstream product differentiation;Welfare
Date: 2020-02
Issue Date: 2021-05-25 11:07:41 (UTC+8)
Abstract: This paper investigates the welfare effect of a vertical merger in a market with downstream product differentiation. Previous studies find that a merger in this setting tends to be welfare-reducing if the merged firm exits the upstream market and the downstream goods are highly differentiated. The reason is that a reduction in the number of upstream suppliers raises the input price and lowers downstream production. This paper departs from previous studies by considering the case in which the merged firm continues to trade in the upstream market. A vertical merger is always procompetitive with this assumption change because, in this case, the merged firm sells inputs in the upstream market if the downstream goods are sufficiently differentiated.
Relation: Academia Economic Papers, 48卷4期, 445-473
Data Type: article
Appears in Collections:[經濟學系] 期刊論文

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