Abstract

http://ssrn.com/abstract=2377160
 


 



Upstream Merger in a Successive Oligopoly: Who Pays the Price?


Øivind Anti Nilsen


Norwegian School of Economics (NHH) - Department of Economics; Institute for the Study of Labor (IZA)

Lars Sorgard


Norwegian School of Economics and Business Administration (NHH); Norwegian School of Economics (NHH) - Department of Economics

Simen Ulsaker


Norwegian School of Economics (NHH) - Department of Economics

December 13, 2013

NHH Dept. of Economics Discussion Paper No. 17/2013

Abstract:     
This study develops and uses a successive oligopoly model, with an unobservable non-linear tariff between upstream and downstream firms, to analyze the possible anti-competitive effects of an upstream merger. We find that an upstream merger may lead to higher average prices paid by downstream firms, but that there is no change in the prices paid by consumers. The model is tested empirically on data for an upstream merger in the Norwegian food sector (specifically, the market for eggs). Consistent with the theoretical predictions of the model, we find that the merger had no effect on consumer prices, but led to higher average prices from the downstream to the upstream firm.

Number of Pages in PDF File: 64

Keywords: Upstream merger, non-linear prices, Vertical contracts

JEL Classification: K21, L41

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Date posted: January 10, 2014  

Suggested Citation

Nilsen, Øivind Anti and Sorgard, Lars and Ulsaker, Simen, Upstream Merger in a Successive Oligopoly: Who Pays the Price? (December 13, 2013). NHH Dept. of Economics Discussion Paper No. 17/2013. Available at SSRN: http://ssrn.com/abstract=2377160 or http://dx.doi.org/10.2139/ssrn.2377160

Contact Information

Oivind Anti Nilsen (Contact Author)
Norwegian School of Economics (NHH) - Department of Economics ( email )
Helleveien 30
N-5045 Bergen
Norway

Institute for the Study of Labor (IZA)
P.O. Box 7240
Bonn, D-53072
Germany
Lars Sorgard
Norwegian School of Economics and Business Administration (NHH) ( email )
Helleveien 30
Bergen, NO-5045
Norway
+47 5 595 9723 (Phone)
+47 5 595 9543 (Fax)
Norwegian School of Economics (NHH) - Department of Economics
Helleveien 30
N-5035 Bergen
Norway

Simen Ulsaker
Norwegian School of Economics (NHH) - Department of Economics ( email )
Helleveien 30
N-5035 Bergen
Norway
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