Working Paper: CEPR ID: DP9617
Authors: Yossi Spiegel
Abstract: I show that partial vertical integration may either alleviates or exacerbate the concern for vertical foreclosure relative to full vertical integration and I examine its implications for consumer welfare.
Keywords: backward integration; consumer surplus; controlling and passive integration; forward integration; investment; vertical foreclosure; vertical integration
JEL Codes: D43; L41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Partial Backward Integration (L14) | Increased Investment by Downstream Firm (d1) (D25) |
| Partial Backward Integration (L14) | Decreased Investment by Rival Downstream Firm (d2) (L19) |
| Increased Investment by Downstream Firm (d1) (D25) | Increased Likelihood of Downstream Foreclosure (G33) |
| Partial Forward Integration (L14) | Decreased Likelihood of Downstream Foreclosure (G33) |
| Partial Forward Integration (L14) | Increased Investment by Rival Downstream Firm (d2) (L19) |
| Passive Backward Integration (L14) | Less Downstream Foreclosure than Controlling Backward Integration (L14) |
| Partial Backward Integration (L14) | Exacerbated Concern for Downstream Foreclosure (F65) |
| Partial Forward Integration (L14) | Mitigated Concern for Downstream Foreclosure (G33) |