bargaining power against other suppliers in the production process. The cost of integration is a loss of exibility in choosing …Improving a company's bargaining position is often cited as a chief motivation to vertically integrate with suppliers …. This paper expands on that view in building a new theory of vertical integration. In my model firms integrate to gain …

marginalization may offset increases in market power and incentives to raise rivals' costs. To study the effects of vertical … integration between insurers and hospitals, we develop a model of bargaining and competition. Integrated firms have incentives to …