Spiller (1985) suggests that "site specific assets can increase the viability of a vertical merger
Lubatkin (1983) suggests that vertical mergers
will most likely benefit from the schedule economies where two levels of production at two stages of a value chain are merged.
In this case, it can be shown that a vertical merger
does not change the seller's production capacity report, but it does cause the merged firm to overstate its consumption capacity.
Starting from our previous work, we have analysed the effects of vertical mergers
in the framework of successive oligopolies on input and output prices, when these are determined by the market mechanism.
In all of the models of foreclosure we have examined, it can be shown that the foreclosed unintegrated rivals in the downstream market will be less profitable after a vertical merger
of a rival.
It argues that network effects tilt the distribution of customer surplus in vertical mergers
on digital markets and therefore there might be a need for less intervention by antitrust authorities in horizontal mergers on digital markets in order to achieve higher economic efficiency.
The word "horizontal" signals that the federal government has wisely decided to throw in the towel on vertical mergers
, that is, those that bring under common management firms that control different stages of the production process.
Remaining chapters discuss exclusive dealing, predatory pricing, price discrimination, horizontal and vertical mergers
, and jurisdictional issues and other limitations on coverage.
Abraham/Taylor 1996), Fan and Goyal (2006) find evidence that vertical mergers
in the U.
Therefore, there is a need for scrutiny of vertical mergers
even in the absence of market power.
For example, without incorporating the concept of "an equally or more efficient competitor," the test for vertical mergers
focuses on the defendant's intent, (52) and the analysis for exclusionary practices that also offer efficiencies (which is raised in the discussion of the new economy) looks to whether a practice is "employed widely in industries that resemble the monopolist' s but are competitive.
Topics covered include: the economics of interconnection; equal access and unbundling; establishing prices for interconnection of wireless networks; antitrust litigation since the Telecom Act went into effect; changes to the universal services requirements; regulations and policies involving horizontal and vertical mergers
and acquisitions; federal versus state regulatory authority; and, the rights and duties arising from the laws of privacy, intellectual property and free speech.