Journal of Economic Theory and Econometrics: Journal of the Korean Econometric Society
Home

About this journal
   Aims and scope

   Editorial board

Submit your article

Archive

Search

Journal of Economic Theory and Econometrics
JETEM/계량경제학보/計量經濟學報/JKES
Journal of the Korean Econometric Society

An analysis on the welfare effect of market entry and price discrimination: The case of horizontally differentiated downstream market

Vol.20, No.1, March , 28–59


English Version |  Korean Version
  •   (Department of Economics, Ewha Womans University)

PDF
Abstract  

Shin and Yoo (2007) showed that under vertical market structure with the downstream market characterized by Cournot competition, it can be welfare-enhancing for the upstream firm to enter the downstream market and discriminate prices against downstream rival firms. This possibly counter-intuitive result arises from reduced double marginalization. This paper shows that Shin and Yoo's (2007) findings may not extend to a setting of horizontally differentiated downstream market. When the downstream market is horizontally differentiated, it may be socially desirable to prohibit price discrimination when the upstream firm enters the downstream market.


Keywords
   vertical market structure, market entry, price discrimination, horizontal differentiation

JEL classification codes
   D43, L13, L41
Links

KCI list
Korean ES
JETEM at SCOPUS

Powered by MathJax