Vertical separation and horizontal mergers

Article Abstract:

The concepts of horizontal mergers and vertically separated companies are studied in a duopoly model comprised of two pairs of symmetric manufacturer-retailer pairs. Horizontal mergers are important from a public policy viewpoint due to alleged improvements in cost efficiency while vertical separation is important in studying the interrelationship between market power and production efficiency. The model suggests that an upstream merger is not competitive in the absence of intra-band competition. Downstream competition, however, is competitive whether or not intra-band competition is present.

Models, Economic aspects, Acquisitions and mergers, Duopolies

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Competition among middlemen when buyers and sellers can trade directly

Article Abstract:

A model is developed to study the impact of direct trade between buyers and sellers on the competition between middlemen. Results show that direct trade can prompt middlemen to attempt to corner a market if demand is inelastic. It is also shown that cornering may be more profitable in goods markets rather than financial markets and that direct trade cannot prevent cornering should cornering become possible.

Distribution of goods, Distribution (Commerce)

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Network competition, product quality, and market coverage in the presence of network externalities

Article Abstract:

The quality of a network product cannot be exclusively controlled by its manufacturer but is more significantly determined by the number of users. It is also assumed that the richer the consumer is, the preference towards higher quality becomes more pronounced. Furthermore, networks subscribing to an industry-set standard tend to have a wider coverage if market organizations are non-cooperative.

Product quality, Consumer preferences

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