On vertical mergers and their competitive effects

Evaluating the Likely Competitive Effects of Horizontal and Vertical Mergers: a New Approach

On Vertical Mergers and Their Competitive E¤ects

It is well known that vertical integration can change an upstream producer’s incentive to supply the integrated ...rm’s downstream rivals. However, it has not been noticed that vertical integration also changes these rivals’ incentives to choose suppliers. This paper develops an equilibrium theory of vertical merger that incorporates strategic behaviors in the input market of both the integrate...

Determining the Competitive Effects of Vertical Integration in Mergers

A common focus of merger review is horizontal mergers, namely transactions bringing together two firms that compete directly for at least some sales. However, antitrust agencies also consider the potential anticompetitive effects of vertical mergers, namely transactions bringing together one firm that sells an input with a firm that uses the input in manufacturing its product. The firm selling ...

Do Vertical Mergers Facilitate Upstream Collusion?∗

In this paper we investigate the impact of vertical mergers on upstream firms’ ability to sustain collusion. We show in a number of models that the net effect of vertical integration is to facilitate collusion. Several effects arise. When upstream offers are secret, vertical mergers faciliate collusion through the operation of a foreclosure effect: Cheating unintegrated firms can no longer prof...

Health care consolidation and the changing health care marketplace. A review of the literature and issues.

This Issue Brief examines the academic literature and issues in consolidation of the hospital sector in the context of responses to changes in the competitive environment. It analyzes the motivations for consolidation as well as its effects. Hospital merger activity has increased dramatically in recent years. The current wave of mergers is primarily a reaction to a competitive environment that ...