Abstract
AbstractIn this paper, we study the impacts of cross‐ownership structure on double marginalization problem (DMP) and social welfare under downstream the Bertrand and Cournot competition. We find that in the Bertrand competition, DMP is more serious under backward cross‐ownership than under forward cross‐ownership. Under forward cross‐ownership, because the upstream firm internalizes part of a retailer's profit, it alleviates the DMP. However, for the whole society, forward cross‐ownership is beneficial with respect to backward cross‐ownership. The mark‐up ratio under forward cross‐ownership is the largest, followed by that under vertical separation. The lowest one is under backward cross‐ownership. The results hold under Cournot competition as well.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
