German Science Foundation (DFG) Funds MaCCI Project by Nocke and Peitz with 480,000 Euro

The German Science Foundation (DFG) funds the project "Vertical Relations and Market Structure" by MaCCI senior researchers Volker Nocke and Martin Peitz for another three years from fall 2014 to fall 2017. Nocke and Peitz start with the observation that firms with market power are pervasive not only in downstream markets, but also in intermediate goods markets. To understand the production and allocation of goods, and hence appropriate economic policies, it is important to take the whole vertical supply chain into account. An understanding of such vertically related markets is key for answering a number of important questions. For instance, do upstream firms have an incentive to use vertical restraints, such as exclusive dealing contracts with retailers, so as to deny competitors access to their distribution channels? What are the effects of vertical mergers on competition, market structure, and welfare? To study these issues for the next three years, Nocke and Peitz receive funding of 480,000 Euro.