On the costs and benefits of vertical integration

dc.contributor.author	Gabrielsen, Tommy Staahl
dc.date.accessioned	2006-06-26T12:31:41Z
dc.date.available	2006-06-26T12:31:41Z
dc.date.issued	2003-06
dc.identifier.issn	1503-2140
dc.identifier.uri	http://hdl.handle.net/11250/165594
dc.description.abstract	We consider a setting where two upstream firms may vertically integrate or contract with a single downstream distributor. Under vertical integration the integrated firm may offer to share the downstream capacity with its upstream rival. Each firm may or may not have a positive outside option by bypassing the existing distributor. We show that the equilibrium never entails vertical integration and all upstream firms will sign vertical contracts with the common distributor. This result contrasts with results from previous literature, suggesting that vertical integration and sharing can be an equilibrium. Implications for welfare are also considered.	en
dc.format.extent	1940300 bytes
dc.format.mimetype	application/pdf
dc.language.iso	eng	en
dc.publisher	SNF	en
dc.relation.ispartofseries	Working paper	en
dc.relation.ispartofseries	2003:18	en
dc.subject	vertical contracts	en
dc.subject	bypass	en
dc.subject	vertical integration	en
dc.subject	gas markets	en
dc.title	On the costs and benefits of vertical integration	en
dc.type	Working paper	en