Computer-owners combine complementary goods to a computer-system. They exchange data with others and between different applications. These interdependencies lead to three different network effects, which are explained in the framework of Hotelling models. In the framework of a one-dimensional...

When a vertically integrated firm competes against non integrated rivals in the input and the final-good markets, the layman's belief is that, when the non-integrated downstream firms purchase part of their input from the up- stream division of the integrated firm, the downstream division will...

This Working Paper brings together three papers prepared as background for discussions at the Second High-Level Conference on Asian Integration cohosted by the Monetary Authority of Singapore and the IMF on May 25, 2006. The first documents recent trends in the intraregional flow of goods and...

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...