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Type	Journal Article
Scope	Discipline-based scholarship
Title	Intimidating competitors - Endogenous vertical integration and downstream investment in successive oligopoly
Organization Unit	Microeconomics, Industrial Organization, and Environmental Economics (Armin Schmutzler)
Authors	Stefan Buehler Armin Schmutzler
Item Subtype	Original Work
Refereed	Yes
Status	Published in final form
Language	English
Journal Title	International Journal of Industrial Organization
Publisher	Elsevier
Geographical Reach	international
ISSN	0167-7187
Volume	26
Number	1
Page Range	247 - 265
Date	2008
Abstract Text	This paper examines the interplay of endogenous vertical integration and cost-reducing downstream investment in successive oligopoly. Analyzing a linear Cournot model, we establish the following key results: (i) Vertical integration increases own investment and decreases competitor investment (intimidation effect). (ii) Asymmetric integration is a non-degenerate equilibrium outcome. (iii) Compared to a benchmark model without investment, complete vertical separation is a less likely outcome. We argue that these findings generalize beyond the linear Cournot model under reasonable assumptions.
Digital Object Identifier	10.1016/j.ijindorg.2006.11.005
PDF File	Download from ZORA
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