Market Concentration and the Analysis of Vertical Organization

Jean-Paul Chavas, Guanming Shi

Abstract


This paper proposes concentration indices that extend the classical Hirschman-Herfindahl Index to include vertical structures for differentiated products. The analysis shows how cross-product substitution/complementarity relationships across vertical channels can affect pricing. It also identifies the role played by market size. The usefulness of the approach is illustrated in an application to a merger analysis in the gasoline market.


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DOI: http://dx.doi.org/10.5539/ijms.v4n1p2

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International Journal of Marketing Studies  ISSN 1918-719X(Print) ISSN 1918-7203(Online) E-mail: ijms@ccsenet.org

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