Skip to main content
Open Access Publications from the University of California

The Program in Law, Economics, and Institutions at U.C. Berkeley includes a weekly workshop for scholarly papers, fellowships for students, a program for visiting scholars, classes for students, and this working paper series. To find out more about us, visit our web site.

Cover page of "A Model of Vertical Oligopolistic Competition"

"A Model of Vertical Oligopolistic Competition"


This paper develops a model of successive oligopolies with endogenous market entry, allowing for varying degrees of product differentiation and entry costs in both markets. Our analysis shows that the downstream conditions dominate the overall profitability of the two-tier structure while the upstream conditions mainly affect the distribution of profits. We compare the welfare effects of upstream versus downstream deregulation policies and show that the impact of deregulation may be overvalued when ignoring feedback effects from the other market. Furthermore, we analyze how different forms of vertical restraints influence the endogenous market structure and provide conditions under which they are welfare enhancing.

Cover page of "Monopolies in Two-Sided Markets: Comparative Statics and Identification"

"Monopolies in Two-Sided Markets: Comparative Statics and Identification"


Many models of monopoly in two-sided markets have been proposed (Rochet and Tirole, 2006), but little is known about them. I provide a full set of comparative statics for three models, one that generalizes that of Rochet and Tirole (2003), a second that generalizes Armstrong (2006) and a third that fuses the two models. This answers a number of questions central to the theoretical literature, such as the effects of market power and price controls and the relationship between different models. I also show how, given exogenous cost variations, these models can be almost fully (locally) identifed (e.g. market power and predatory pricing), tested and distinguished from one another. I highlight applications of the results to a wide variety of theoretical, empirical and policy questions, including merger analysis.