Details

Autor(en) / Beteiligte

• Frasco, Gregg

Titel

Vertical Integration and Contractual Alternatives with a Perfectly Competitive Output Market: A Generalization

Ist Teil von

• Southern economic journal, 1986-10, Vol.53 (2), p.509-514

Ort / Verlag

Chapel Hill, N.C., etc: Southern Economic Association and the University of North Carolina at Chapel Hill

Erscheinungsjahr

1986

Quelle

Alma/SFX Local Collection

Beschreibungen/Notizen

• Practices that are economically equivalent should be granted the same treatment under the antitrust laws. For special cases, Blair and Kaserman (1978, 1980, 1982) and Inaba (1980, 1982) have shown the economic equivalences between vertical integration and full line forcing and between vertical integration and a tax on output. That is, they have shown that the price, quantity, and cost of output that result under these contractual alternatives to vertical integration are the same as when the input monopolist is able to vertically integrate, take over all of the input-purchasing firms, and set the monopoly price for output. These equivalences are shown here without imposing the rather severe restrictions adopted by Blair-Kaserman and Inaba. Specifically, it is demonstrated that their special-case results can be considerably generalized by: 1. showing that it is not essential to assume constant returns to scale in the production of the input or the output, and 2. bringing the analysis in the output market down to the level of the individual firm.