Localized Competition, Heterogeneous Firms and Vertical Relations

Marco Alderighi, Claudio A. Piga

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

This paper investigates the link between firms' geographic configuration and market power in imperfect markets. We consider two related setups. The first illustrates the relevant characteristics of the pricing equilibrium. A main implication is that the equilibrium price vector changes in accordance with the firms' spatial configuration. The second, where firms operate as downstream retailers affiliated to rival upstream wholesalers, shows that upstream market power is strongly affected by an index of geographic concentration which reflects the spatial configuration of retailers. Finally, our analysis provides several insights for market delineation as well as merger evaluation and remedies.

Original languageEnglish
Pages (from-to)46-74
Number of pages29
JournalJournal of Industrial Economics
Volume60
Issue number1
DOIs
Publication statusPublished - 1 Mar 2012
Externally publishedYes

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