We provide a theoretical framework to discuss the relation between firm size and vertical structures. The framework is based on a Hotelling model with three downstream and three upstream firms. Each downstream firm procures its input from each upstream firm and the procurement problems affect...

This paper presents the development of an equilibrium theory of vertical merger that incorporates strategic behaviors in the Hotelling-type location model for the purpose of considering the relationship between the strategies of downstream firms for product differentiation and vertical...

This paper studies the welfare effects of third-degree price discrimination under oligopolistic competition with horizontal product differentiation. We derive a necessary and sufficient condition for price discrimination to improve social welfare: the degree of substitution must be sufficiently...

We investigate a multi-market Cournot model with strategic process research and development (R&D) investments wherein a multi-market firm meets new competitors that enter one of the markets. We show that entry can enhance the total R&D expenditures of the multi-market firm. Moreover, the...

When upstream firms compete in quantity and freely enter the input market, competition among downstream firms reduces the input price (the marginal cost of downstream firms). The industry profits of downstream firms competing in quantity can increase with the number of downstream firms.