We study the effects of a vertical merger in a standard setting with a single upstream supplier of a critical input and two downstream customers that compete with each other. Initially, the upstream supplier first announces prices, then the two downstream customers announce their retail prices. We show that this pre-merger timing does not survive a vertical merger. The merged firm may choose to be either a first mover or a second mover in the post-merger pricing game with its unintegrated rival. Our results suggest that a vertical merger is unlikely to lead to a significant upstream price increase unless the downstream firm involved in the merger is relatively large. In such a case, an upstream price increase is to be expected. For vertical mergers involving a large downstream firm, in most simulations the merged firm reduces its downstream price. Its rival often increases its price. In all simulations, the rival is caught in a price squeeze. This calls into question the rival’s long-term viability.

我们研究了标准设置中垂直合并的影响，其中有一个关键输入的上游供应商和两个相互竞争的下游客户。最初，上游供应商先公布价格，然后两个下游客户公布零售价。我们表明，这种合并前的时机无法在垂直合并中幸存下来。合并后的公司可能会选择在与未整合的竞争对手的合并后定价博弈中成为先行者或后行者。我们的结果表明，垂直合并不太可能导致上游价格显着上涨，除非参与合并的下游公司相对较大。在这种情况下，上游价格上涨是意料之中的。对于涉及大型下游公司的垂直合并，在大多数模拟中，合并后的公司会降低其下游价格。它的竞争对手经常提高价格。在所有模拟中，竞争对手都陷入了价格挤压之中。这让人质疑竞争对手的长期生存能力。