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Vertical Integration of Multiproduct Monopolists


E2021003                                                     2021-07-07

Wang Hao


This note revisits the competition effect of vertical integration. An upstream firm and a downstream firm engage in price- or quantity-choosing game in a market. Each of the firms offers a product series. It is found that the integration of the two firms may not necessarily lower the equilibrium prices because it precludes the “indirect competition” in the market. Therefore, vertical integration could have antitrust concern even in the absence of strategic purpose.

 Antitrust, Multiproduct, Vertical integration

JEL codes: L1, L4

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