英文摘要 |
This paper uses a successive duopoly model, under the condition of product differentiation, to analyze the impacts of vertical integration on intermediate goods market and final goods market. It also discusses how vertical integration affects the upstream and downstream firms and social welfare. We find the following results. First, the smaller the market size which the nonintegrated downstream firm faces and the more substitutable the two final products are, the less possible it is to encounter market foreclosure after vertical integration. Thus, the production of a non-integrated downstream firm will be larger and the price of final goods will be lower. Second, if market foreclosure for intermediate goods does not happen after vertical integration, the profit of a non-integrated upstream firm will decrease. Third, it is possible for the profit of a non-integrated downstream firm to increase after vertical integration if the two final goods are (perfect) substitutes; it is possible for the profit of non-integrated downstream firms to decrease after vertical integration if the two final goods are complements. Fourth, it is also possible for social welfare to decrease if the vertical integration takes place. |