Wednesday, June 15, 2022

Bertrand competition in vertically related markets

Bertrand competition in vertically related markets

By:

Tomomichi Mizuno (Graduate School of Economics, Kobe University); Kazuhiro Takauchi (Faculty of Business and Commerce, Kansai University / Research Fellow, Graduate School of Economics, Kobe University)

Abstract:

We build a successive Bertrand model with homogenous good. We show that increasing the pro- duction efficiency of upstream industry can reduce upstream Firms' profits. We also show that increasing the production efficiency of downstream industry may reduce downstream Firms' prof- its. Hence, an industrial policy that aims at improving production efficiency may be undesirable for Firms.

https://lawprofessors.typepad.com/antitrustprof_blog/2022/06/bertrand-competition-in-vertically-related-markets.html

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