The effects of vertical integration on competing input suppliers
Abstract: When a downstream firm buys an input supplier, it can reduce its costs of using that input. Other input suppliers typically respond by pricing more aggressively, given the demand reduction, which tends to lower input supply costs to other firms. Thus, a vertical merger may lower rivals' costs instead of raising them.
File(s): File format is text/html http://www.clevelandfed.org/Research/review/1999/99-q1-mcafee.pdf
Provider: Federal Reserve Bank of Cleveland
Part of Series: Economic Review
Publication Date: 1999
Issue: Q I