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Strategic Reaction of Vertically Integrated Firms to Downstream Entry: Deterrence or Accommodation

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Abstract

The purpose of this paper is to analyze strategic behavior of vertically integrated firms when there is downstream entry, taking into account the balance between “competition in the market” and “competition for the market”. This analysis can serve to explain diverse distributional structures, including the coexistence of vertically integrated firms and independent retailers. And it shows that the relative efficiency of downstream entrants and the level of competition among incumbents are two major factors in determining equilibrium configuration.

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Authors and Affiliations

  1. Network R&D Center, Network R&D Center, SKTelecom, 9-1 Sunae-dong, Pundang-gu, Sungnam City, Kyonggi-do, 463-784, Korea

    Jae-Do Song

  2. Korea Advanced Institute of Science and Technology, Graduate School of Management, Korea Advanced Institute of Science and Technology, Cheongryangri-dong, Dongdaemun-gu, Seoul, 132-012, Korea

    Jae-Cheol Kim

Authors
  1. Jae-Do Song
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  2. Jae-Cheol Kim
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Song, JD., Kim, JC. Strategic Reaction of Vertically Integrated Firms to Downstream Entry: Deterrence or Accommodation. Journal of Regulatory Economics 19, 183–199 (2001). https://doi.org/10.1023/A:1011153408097

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  • DOI: https://doi.org/10.1023/A:1011153408097

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