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Vertical Integration and Shared Facilities in Unregulated Industries

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Abstract
I this paper we consider a market situation in which initially there is an unintegrated monopoly upstream entry and vertical integration. The equilibrium entry mode -sharing the incumbent facility or building a new facility- is derived as well as the equilibrium market structure. Several policy prescriptions are set forth.

Suggested Citation

  • Eduardo Saavedra & Felipe Balmaceda, 2004. "Vertical Integration and Shared Facilities in Unregulated Industries," ILADES-UAH Working Papers inv153, Universidad Alberto Hurtado/School of Economics and Business.
    • Handle: RePEc:ila:ilades:inv153
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    References listed on IDEAS

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    1. Dixit, Avinash, 1980. "The Role of Investment in Entry-Deterrence," Economic Journal, Royal Economic Society, vol. 90(357), pages 95-106, March.
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    18. repec:bla:jindec:v:49:y:2001:i:3:p:319-33 is not listed on IDEAS
    19. James D. Reitzes & David T. Levy, 1995. "Price Discrimination and Mergers," Canadian Journal of Economics, Canadian Economics Association, vol. 28(2), pages 427-436, May.
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    Cited by:

    1. Felipe Balmaceda, 2009. "Mergers and CEO Power," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(3), pages 454-486, September.
    2. Felipe Balmaceda & Eduardo Saavedra, 2005. "Integración Vertical Eficiente y Compartimiento de Facilidades en Presencia de Entrada: Un Marco Conceptual," ILADES-UAH Working Papers inv168, Universidad Alberto Hurtado/School of Economics and Business.
    3. Agostini, Claudio & Saavedra, Eduardo H., 2013. "Chile: Port congestion and efficient rationing in cargo transfer operations," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.

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    More about this item

    Keywords

    Esencial facilities; shared facilities agreements; vertical integration; strategic substitutes;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts

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