Bertrand-Cournot profit reversal in a vertical structure with cross ownership

Mukherjee, Arijit; Wang, Leonard F.S.; Sun, Ji

Abstract

We provide a new reason for Bertrand-Cournot profit reversal. In a two-tier industry with a profit-maximising input supplier and symmetric final good producers, we show that the profit reversal occurs under passive cross ownership among firms.

Citation

Mukherjee, A., Wang, L. F., & Sun, J. (2024). Bertrand-Cournot profit reversal in a vertical structure with cross ownership. Economics Letters, 238, Article 111681. https://doi.org/10.1016/j.econlet.2024.111681

• Journal Article Type: Article
• Acceptance Date: Mar 28, 2024
• Online Publication Date: Mar 29, 2024
• Publication Date: 2024-05
• Deposit Date: Apr 12, 2024
• Publicly Available Date: Apr 12, 2024
• Journal: Economics Letters
• Print ISSN: 0165-1765
• Electronic ISSN: 1873-7374
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 238
• Article Number: 111681
• DOI: https://doi.org/10.1016/j.econlet.2024.111681
• Keywords: Bertrand competition; Cournot competition; Cross ownership; Profit; Two-tier industry
• Public URL: https://nottingham-repository.worktribe.com/output/33566081
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0165176524001642?via%3Dihub