The Effects of Vertical Organization on the Pricing of Differentiated Products

We investigate differentiated product pricing and the effects of vertical organization under imperfect competition. We rely on vertical measures of concentration (termed VHHI) to study how the exercise of market power varies with substitution/complementarity relationships among products and vertical structures. This approach is applied to U.S. soybean seed pricing under vertical integration versus licensing. We find evidence that vertical organization affects seed prices, with an impact ranging from 1.87% to 13.6% of the mean price. These effects vary by institutional setup.We also find that complementarity can mitigate price enhancements associated with market concentration.


Issue Date:
2011-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/119157
Published in:
Journal of Agricultural and Resource Economics, Volume 36, Number 3
Page range:
448-464
Total Pages:
17




 Record created 2017-04-01, last modified 2017-08-26

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