We examine cost-reducing investment in vertically-related oligopolies, where firms may be vertically integrated or …. (ii) Vertical integration increases own investment and decreases competitor investment. (iii) Firms may integrate …

quality. Under reasonable assumptions on demand, investment incentives turn out to be smaller under vertical separation than … market can sometimes improve incentives. With suitable non-linear access prices investment incentives under separation become … identical to those under integration. -- investment incentives ; networks ; quality ; vertical externality …