Abstract

http://ssrn.com/abstract=2231131
 


 



On Vertical Market Structure and Buyer Countervailing Power


Xu-liang WU


Dongbei University of Finance and Economics (DUFE) - Center for Industrial and Business Organization (DUFE)

March 10, 2013


Abstract:     
The paper redefines different types of vertical market structure, such as double monopoly, bilateral monopoly, and two-sided monopoly. The core issue can be stated as follows: When there is bilateral monopoly, what are the differences between two-sided monopoly and one-sided monopoly as far as welfare consequences of retailers’ rising buyer power are concerned. The results show that in tow-sided monopoly situation, from consumer welfare perspective, the results of vertical integration are better than the results of vertical separation, whereas in one-sided monopoly situation, the results of vertical separation are better than the results of vertical integration, so the vertical market structure of one-sided monopoly or one-sided competition effectively overcomes double marginalization problem, to counter the forces at this time the buyer countervailing power hypothesis is somewhat reasonable. Taking Inter-period factor into account, this conclusion is even more credible.

Keywords: Vertical Market Structure, Buyer Countervailing Power, Two-sided Monopoly, Antitrust Law

JEL Classification: L12, L42, L43

working papers series


Not Available For Download

Date posted: March 11, 2013  

Suggested Citation

WU, Xu-liang, On Vertical Market Structure and Buyer Countervailing Power (March 10, 2013). Available at SSRN: http://ssrn.com/abstract=2231131

Contact Information

Xu-liang WU (Contact Author)
Dongbei University of Finance and Economics (DUFE) - Center for Industrial and Business Organization (DUFE) ( email )
Dalian, Liaoning
China
086-411-84712129 (Phone)
086-411-84710595 (Fax)
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