In this paper we investigate the impact of vertical mergers on upstream firms’ ability to sustain collusion. We show in … a number of models that the net effect of vertical integration is to facilitate collusion. Several effects arise. When … upstream offers are secret, vertical mergers facilitate collusion through the operation of an outlets effect: Cheating …

We investigate the impact of vertical mergers on upstream firms' ability to sustain tacit collusion in a repeated game …. We identify several effects and show that the net effect of vertical integration is to facilitate collusion. Most … importantly, vertical mergers facilitate collusion through the operation of an outlets effect: cheating unintegrated firms can no …