中間財價格不會因為有廠商整合而上升，故中間財市場並不會出現市場封殺的狀況，且整合並不一定會使最終財價格上升而損害消費者權益，只有在整合家數過多的情況下才會對消費者不利。 This paper establishes a model with two cost-differentiated upstream firms and N identical downstream firms in the market. Assume upstream firms can be either Cournot competition or Leader-Follower competition but downstream firms can only be Cournot competition. The equilibrium outcome under competition will be derived and then compared with the results under vertical integration as well as different foreclosure strategies. We would like to explore the effect of vertical integration with foreclosure strategy simultaneously on prices of intermediate goods and final goods.
We found that if the number of target downstream is not limited, the merging upstream will try their best to merger as more downstream firms as possible until all the downstream firms are merged completely. If only the cost superior firm takes merger strategy and adopts partial foreclosure, it will buy intermediate goods to increase its profit no matter the upstream market is Cournot competition or Leader-Follower competition. However, if the cost inferior firm takes merger strategy and adopts partial foreclosure, it will buy intermediate goods when its cost is high above a certain level, but sell intermediate goods when its cost is below a certain level.
The price of intermediate goods will not increase after the firms integrate. So the market foreclosure will not happen in the intermediate market. And the integration will not always make the final price increase to damage the consumer surplus. Only when there are too many firms integrate, then the consumer surplus will be decreased.