Recall that first
vertical contract terms are established for the current period (e.
So even basic cereals are now being produced for specialized use for further processing, on a
vertical contract basis.
Hastings asks how much, if any, of the differences in retail gasoline prices between markets is attributable to differences in the composition of
vertical contract types at gasoline stations in each market.
Further, it is likely that
vertical contracts between insurers and body shops reduce the instance of insurance fraud.
COMPETITIVE MARKETS, VERTICAL CONTRACTS AND NETWORKS
The overall welfare effects of vertical integration or these substitute nonstandard
vertical contracts when there is market power upstream and input-substitution possibilities downstream are positive, although the effect on consumer prices is ambiguous when the downstream market is competitive.
For example, more liquid aircraft are more redeployable and should then have longer financing contracts (as in Shleifer and Vishny, 1992), but are also less specific and should then have shorter
vertical contracts (as in Williamson, 1979).
Under
vertical contracts, the processor owns the product in production, while the contractee generally furnishes the labor and facilities for production.
Fumagalli and Motta (2001) consider an industry characterized by secret
vertical contracts, and examine a benchmark case where there are two vertical chains, in which two upstream manufacturers sell to two downstream retailers, thereby demonstrating that a downstream merger is more welfare detrimental than an upstream merger.
This Regulation lays down that all
vertical contracts and agreements, in order to be granted exemption, must be notified to the Commission's Competition Directorate-General prior to the date of exemption.
Typically, leaks in the boundary between the categories have flowed one way, in looking at how concerns in the horizontal category might warrant legal limitations on the freedom to write
vertical contracts.
