Anticompetitive Vertical Merger Waves

Johan Hombert (1) , Jérôme Pouyet (2, 3) , Nicolas Schutz (4)

1 HEC Paris - Ecole des Hautes Etudes Commerciales
2 THEMA - Théorie économique, modélisation et applications
3 ESSEC Business School
4 Universität Mannheim

We develop a model of vertical merger waves and use it to study the optimal merger policy. As a merger wave can result in partial foreclosure, it can be optimal to ban a vertical merger that eliminates the last unintegrated upstream firm. Such a merger is more likely to worsen market performance when the number of downstream firms is large relative to the number of upstream firms,

Domaines: Sciences de l'Homme et Société; Économie et finance quantitative [q-fin]

Johan Hombert, Jérôme Pouyet, Nicolas Schutz. Anticompetitive Vertical Merger Waves. Journal of Industrial Economics, 2020, 67 (3-4), pp.484-514. ⟨10.1111/joie.12204⟩. ⟨hal-03330587⟩