A Note on Successive Oligopolies and Vertical Mergers

Abstract: In this paper we analyze how the technology used by downstream firms can influence input and output market prices resulting from collusive agreements between some downstream and upstream firms. We show via an example that both these prices increase under a decreasing returns technology while the contrary holds when the technology is constant. Key words: successive oligopolies, vertical integration, technology, foreclosure. any industries, like the media markets, have been objects of profound mutations, which are both of a technological and structural nature. For instance, the technological developments of new distribution channels, like the cable and wireless technologies, have challenged the older ways of distributing news and entertainment to consumers. Similarly, collusive agreements between content producers and distributors have affected the traditional context of competition. These upheavals have not only completely modified the strategies of the firms involved in these industries, but also the theoretical tools used b