- This event has passed.
Partial Vertical Ownership
December 1, 2014, 14:30 - 15:30
We are pleased to invite you to a seminar on partial vertical ownership, Monday 1 December.
Assistant Professor, the Faculty of Economics and Management, Catholic University of Porto
Location: Room E209, Economic Department, Norwegian School of Economics (NHH)
The seminar will not be streamed live
The seminar will be held in English
On the Topic:
Gonçalves analyses the market impact of a partial vertical integration whereby a retail firm acquires a non-controlling stake in the capital of an upstream firm, which supplies an essential input. In addition, he assume that this upstream firm can price discriminate between two groups of retail firms: the retail firm which (now) owns a stake in its capital and all of its retail rivals. Although apparently counter intuitive, we find that it is profit-maximizing for the upstream firm to discriminate against its retail shareholder. Compared to a vertical separation scenario, this partial vertical integration induces input foreclosure, higher retail prices and lower social welfare. From a competition policy viewpoint, this suggests that such partial vertical integrations should be analyzed with particular concern.