Please use this identifier to cite or link to this item: http://hdl.handle.net/2381/7469
Title: Vertical integration and product innovation
Authors: Mukherjee, Arijit
Zanchettin, Piercarlo
First Published: Oct-2007
Publisher: Dept. of Economics, University of Leicester
Abstract: We study vertical integration and product innovation (in the form of horizontal product differentiation) as interdependent strategic choices of vertically related firms. We consider product innovation in the downstream market as a strategic decision of innovative firms facing a threat of vertical integration and market foreclosure by an upstream monopolist. Our main finding is that, although product differentiation allows to soften product market competition and to avoid market foreclosure, the downstream market may prefer less product differentiation to deter vertical integration. Therefore, less product innovation can be a possible social cost of a lenient antitrust policy.
Series/Report no.: Papers in Economics
07/12
Links: http://www.le.ac.uk/economics/research/discussion/papers2007.html
http://hdl.handle.net/2381/7469
Type: Report
Appears in Collections:Reports, Dept. of Economics

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