We study the effects of a vertical merger in a setting with a single upstream supplier of a critical input and two downstream customers which compete with each other. Initially, the upstream supplier first announces prices, then the two downstream customers announce their retail prices. We find...

We study two vertical constraints on pricing which have received little study. A vertical MFN (“VMFN”) refers to an MFN on retail prices that is sought by an upstream manufacturer. A vertical margin constraint (“VMC”) refers to a requirement that the margin earned by a retailer on a...

Moresi and Salop (2013) have extended the “upward pricing pressure” approach used in analyzing horizontal mergers to the analysis of vertical mergers. They present test expressions called the vGUPPIu and vGUPPId to see if the upstream and downstream prices will rise as a result of the...