Price Discrimination and Forward Integration

Research output: Contribution to journalArticlepeer-review

Abstract

An input monopolist could price discriminate among all downstream industries by integrating into all but the one with the most inelastic derived demand. We demonstrate that a dominant firm will have a similar incentive to integrate into industries with more elastic derived demands. However, the extent of the fringe of competitive input suppliers will determine the number of such industries into which integration can profitably be maintained.
Original languageEnglish (US)
Pages (from-to)209-217
JournalThe Bell Journal of Economics
Volume9
Issue number1
DOIs
StatePublished - 1978

Keywords

  • industrial market
  • market prices
  • monopoly
  • derived demand
  • supply
  • aluminum industry
  • price discrimination
  • elasticity of demand
  • industrial production
  • price elasticity of demand

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