Assuming that oligopolistic downstream firms take intermediate goods prices as given and that upstream and integrated firms choose their quantities first and simultaneously, this note shows that vertical mergers between upstream and downstream firms are procompetitive.

In this paper, we discuss the case of the integration between NSK and Amatsuji Steel Ball by using the successive oligopoly model. We show that the integration does not lead to input foreclosure. However, it leads to customer foreclosure, if the fixed cost of a rival firm in the upstream market...

Assuming that oligopolistic downstream firms take intermediate goods prices as given and that upstream and integrated firms choose their quantities first and simultaneously, this note shows that vertical mergers between upstream and downstream firms are procompetitive.