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In a two-tier oligopoly, where the downstream firms are locked in pair-wise exclusive relationships with their upstream input suppliers, the equilibrium mode of competition in the downstream market is endogenously determined as a renegotiation-proof contract signed between each downstream firm...
Persistent link: https://www.econbiz.de/10010327199
Many cartels are formed by individual managers of different firms, but not by firms as collectives. However, most of the literature in industrial economics neglects individuals' incentives to form cartels. Although oligopoly experiments reveal important insights on individuals acting as firms,...
Persistent link: https://www.econbiz.de/10012886573
We examine how competition in international markets affects a union's choice of wage regime which can be either uniform or discriminatory. Firms are heterogenous with regard to international competition. When unions choose their wage regimes sequentially, a discriminatory outcome becomes more...
Persistent link: https://www.econbiz.de/10010308218
We analyze the role of consumer expectations in a Hotelling model of price competition when products exhibit network effects. Expectations can be strong (stubborn), weak (price-sensitive) or partially stubborn (a mix of weak and strong). As a rule, the price-sensitivity of demand declines when...
Persistent link: https://www.econbiz.de/10010303797
We study zero-rating, a practice whereby an Internet service provider (ISP) that limits retail data consumption exempts certain content from that limit. This practice is particularly controversial when an ISP zero-rates its own vertically integrated content, because the data limit and ensuing...
Persistent link: https://www.econbiz.de/10012024727
Building on the seminal paper of Ordover, Saloner and Salop (1990), I study the role of reputation building on foreclosure in laboratory experiments. In one-shot interactions, upstream firms can choose to build a reputation by revealing their price history to the current upstream competitor. In...
Persistent link: https://www.econbiz.de/10011555354
products and frequently use multiple or exclusive rebate contracts to exercise market power. Based on a Hotelling model of … horizontal and vertical product differentiation, we examine the controversy whether there exists a superior rebate scheme as far … differentiation, we find that firms clearly prefer multiple over exclusive rebate contracts. Contrary, there exists no rebate form …
Persistent link: https://www.econbiz.de/10010308280
more bargaining power to the merged entity than a horizontal merger to monopoly. The model is applied to analyze strategic …
Persistent link: https://www.econbiz.de/10010309290
Considering a vertical structure with perfectly competitive upstream firms that deliver a homogenous good to a differentiated retail duopoly, we show that upstream fixed costs may help to monopolize the downstream market. We find that downstream prices increase in upstream firms' fixed costs...
Persistent link: https://www.econbiz.de/10010420408
convey more bargaining power to the merged entity than a horizontal merger to monopoly. In a bidding game for an exogenously …
Persistent link: https://www.econbiz.de/10013258436