This study constructs a successive Cournot model to investigate the possibility that a separated upstream input supplier can solely sell the intermediate good to a separated downstream manufacturer through an exclusive contract in the presence of a vertically integrated rival. We find that the...

We investigate the effect of a vertical merger on downstream firms' ability to collude in a repeated game framework. We show that a vertical merger has two main effects. On the one hand, it increases the total collusive profits, increasing the stakes of collusion. On the other hand, it creates...

We investigate the possibility for two vertically related firms to at least partially collude on the wholesale price over an in.nite horizon to mitigate or eliminate the e¤ects of double marginalisation, thereby avoiding contracts which might not be enforceable. We characterise alternative...

A model of franchising competition in locationally differentiated products is constructed. A franchisor (upstream firm) collects a marginal transfer fee per unit of output sold by a franchisee (downstream firm). For example, the marginal transfer fee can be realized as a markup on variable...

New Keynesian models of price setting under monopolistic competition involve two kinds of inefficiency: the price level is too high because firms ignore an aggregate demand externality, and when there are costs of changing prices, price stickiness may be an equilibrium response to changes in...