上下游间的保密合同.pptx

Upstream mergers, downstream mergers, and secret vertical contracts 陈嘉佳 1571163 何彤彤 1571165 source Keywords unobservable contracts, mergers, vertical restraints, bargaining power O N E Introduction TEXT HERE In this part you should describe your business to the investor. You have to make sure he can make it clear T W O The Model an industry in which there are two manufacturers or upstream firms U 1 ,U 2 a retailer or downstream firm D 1 ,D 2 all firms are assumed to operate at constant return to scale contracts stipulated by a producer and a downstream firm remain unobserved by the rival upstream the final product is homogeneous and that downstream producers compete in quantities suggestion structure U1 D1 upstream manufacturers downstream retailers secret vertical contracts U2 D2 D1 and D2 transform the intermediate product into the final one and compete in quantities. The interaction between the two firms is modelled as follows: The pre-merger case franchise fee Total price U offer D a non-linear contract The quantity of the production the first order condition is: The pre-merger case The downstream firm’s payoff is given by: Notice that, since contracts are unobservable, the best reply does not depend on the wholesale price established by the other upstream producer. The first order condition is given by: The upstream firm U i can use the franchise fee FF i to extract all the downstream firm’s profit and, for a given w j it maximizes: Up/downstream merger Other Contents T H R E E F O U R Conclusion Compare the results To conclude, when contracts are secret the upstream merger has no impact on consumers while the merging firms obtain exactly the sum of the pre-merger profits. before after In a model with unobservable contracts, we have showed that downstream mergers are more likely to give rise to welfare detrimental effects than upstream mergers. Conclusion References Bonanno, G. Vickers, J. (1988). Vertical separation. Journal of Industrial Economi