Passive Forward Ownership and Upstream Collusion

9 Pages Posted: 22 Jan 2022

See all articles by Ioannis Pinopoulos

Ioannis Pinopoulos

National and Kapodistrian University of Athens - Department of Economics

Konstantinos Charistos

University of Macedonia - Department of Economics

Panagiotis Skartados

Department of Economics, University of Crete

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Abstract

We examine the effects of passive forward ownership on the sustainability of upstream collusion. We consider a homogeneous Cournot duopoly with competing vertical chains. In one vertical chain, the upstream firm has passive ownership over its downstream client. We find that passive forward ownership hinders upstream collusion. We identify as the main driver of our finding the negative effect that passive forward ownership has on the upstream non‐owner’s collusive profits.

Keywords: tacit collusion, Passive vertical ownership, Competing vertical chains

Suggested Citation

Pinopoulos, Ioannis and Charistos, Konstantinos and Skartados, Panagiotis, Passive Forward Ownership and Upstream Collusion. Available at SSRN: https://ssrn.com/abstract=4015061 or http://dx.doi.org/10.2139/ssrn.4015061

Ioannis Pinopoulos (Contact Author)

National and Kapodistrian University of Athens - Department of Economics ( email )

1, Sofokleous Str
Athens, GR- 10559
Greece

Konstantinos Charistos

University of Macedonia - Department of Economics ( email )

Thessaloniki, 54006
Greece

HOME PAGE: http://www.uom.gr

Panagiotis Skartados

Department of Economics, University of Crete ( email )

University Campus at Gallos
Rethymno, Crete
Greece

HOME PAGE: http://sites.google.com/view/pskartados

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