Managerial Firms , Vertical Integration , and Consumer Welfare ∗

@inproceedings{Legros2004ManagerialF,
  title={Managerial Firms , Vertical Integration , and Consumer Welfare ∗},
  author={Patrick Legros and Andrew F. Newman},
  year={2004}
}
We show that vertical integration decisions of managers may affect adversely consumers even in the absence of monopoly power in either supply or product markets. This effect is most likely to come about when demand is initially high and there is a negative supply shock or when demand is low and there is a positive demand shock. The results are robust to the… CONTINUE READING