Asymmetric Complements in a Vertically Differentiated Market: Competition or Integration?

We study the effects of integration of asymmetric complements when they are vertically differentiated. While confirming the standard effects of integration, namely the internalization of the double marginalization externality and the reduction of competition, we point out a new positive quality effect, due to an increase in the average quality of the goods on sale. We also characterize the conditions under which integration turns out to be optimal for both firms' and consumers. We thus provide valuable directions for competition agencies when considering the joint ownership in vertically differentiated markets

Asymmetric Complements in a Vertically Differentiated Market: Competition or Integration?

We study the effects of integration of asymmetric complements when they are vertically differentiated. While confirming the standard effects of integration, namely the internalization of the double marginalization externality and the reduction of competition, we point out a new positive quality effect, due to an increase in the average quality of the goods on sale. We also characterize the conditions under which integration turns out to be optimal for both firms' and consumers. We thus provide valuable directions for competition agencies when considering the joint ownership in vertically differentiated markets

Hedonic and environmental quality: A hybrid model of product differentiation

In this paper, we analyze how strategic competition between a green firm and a browncompetitor develops when their products are differentiated along two dimensions: hedonicquality and environmental quality. The former dimension refers to the pure (intrinsic) per-formance of the good, whereas the latter dimension has a positional content: buying greengoods satisfies the consumer’s desire to be portrayed as a socially worthy citizen. We con-sider the case in which these quality dimensions are in conflict with each other so that thehigher the hedonic quality of a good, the lower the corresponding environmental quality.We characterize the equilibrium configurations and discuss the policy implications derivingfrom our analysis

R&D cooperation, innovation, and growth

This paper presents a standard endogenous growth framework in which the source of growth is represented by vertical innovations. The crucial assumption we introduce is that there is a positive information gap concerning the discovery of innovation. The aim of reducing the information-dissemination lag provides incentives for firms to decide to merge their research efforts. Also, we find that the skilled - unskilled wage gap is strongly related to this phenomenon. We prove that changing antitrust attitudes toward efficiency-motivated mergers in contestable industries may simultaneously explain observed changes in the industry structure, qualitative innovation, wage inequality, and labor-supply composition

Air traffic expansion and monopoly princing

In this paper we examine the pricing policy, and the ensuing optimal expansion of the aircraft fleet capacity, for a monopolistic air company. We characterise the optimal pricing and show that the resulting capacity ex-pansion is such that the length of the time interval between two successive purchases of a plane is constant through time