Monopolies Exploit Consumers More Than Competitive Markets, Study Finds
Vertical integration can impact bargaining outcomes between firms, especially when there is competition in the supply chain. The study shows that firms integrating under upstream competition experience stronger effects on bargaining than those under upstream monopoly. Integration can also help firms internalize competitive effects, leading to potential monopolization. Contrary to common belief, upstream competition may not always reduce the incentive for vertical integration, depending on downstream competition levels.