We propose a model of the European gas market where the risk that Russian deliveries are interrupted is endogenized. While Russia's attempts to buy considerable parts of the European downstream industry have faced strong political opposition, we argue that Russian participation in the downstream...

We analyse the effect of vertical integration in a two-stage oligopoly where the supply of one of the upstream players is insecure because this player suffers from stochastic costs. He may decide not to deliver if costs are too high. We formulate this situation as a model of the European gas...