In a framework with an upstream monopoly and downstream duopoly, we analyze the impact of vertical integration when downstream firms have convex costs.

In the heterogeneous experimental oligopoly markets of this paper, sellers first choose capacities and then prices. In equilibrium, capacities should correspond to the Cournot prediction. In the experimental data, given capacities, observed price setting behavior is in general consistent with...

We analyze the impact of vertical integration when a monopolistic producer can make a capital commitment before deciding on output.