Book contents
- Antitrust Policy in Health Care Markets
- Antitrust Policy in Health Care Markets
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Acknowledgments
- Table of Cases
- 1 Health Care Markets and Competition Policy
- 2 Antitrust Policy in the United States
- Part I Monopoly
- Part II Seller Cartels
- Part III Monopsony
- Part IV Buyer Cartels
- Part V Mergers and Acquisitions
- 17 The Economics of Horizontal Mergers
- 18 Horizontal Merger Policy
- 19 The Economic Theory of Vertical Integration
- 20 Vertical Merger Policy
- 21 Concluding Remarks
- Index
- References
19 - The Economic Theory of Vertical Integration
from Part V - Mergers and Acquisitions
Published online by Cambridge University Press: 24 November 2022
- Antitrust Policy in Health Care Markets
- Antitrust Policy in Health Care Markets
- Copyright page
- Dedication
- Contents
- Figures
- Tables
- Acknowledgments
- Table of Cases
- 1 Health Care Markets and Competition Policy
- 2 Antitrust Policy in the United States
- Part I Monopoly
- Part II Seller Cartels
- Part III Monopsony
- Part IV Buyer Cartels
- Part V Mergers and Acquisitions
- 17 The Economics of Horizontal Mergers
- 18 Horizontal Merger Policy
- 19 The Economic Theory of Vertical Integration
- 20 Vertical Merger Policy
- 21 Concluding Remarks
- Index
- References
Summary
We discuss vertical mergers, which occur when two firms at different levels of the supply chain consolidate to become one firm. Vertical mergers can provide procompetitive benefits when they decrease transaction costs, such as those incurred in market exchange, and eliminate double marginalization. These mergers, however, may increase a firm’s market power, which could lead to raising rivals’ costs or market foreclosure. In this chapter, we provide a comprehensive theory of vertical integration. We also discuss mergers that involve suppliers of complementary goods.
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- Information
- Antitrust Policy in Health Care Markets , pp. 434 - 456Publisher: Cambridge University PressPrint publication year: 2022