Essays on Vertical Mergers, Advertising, and Competitive Entry
May 2008
in “
Texas ScholarWorks (Texas Digital Library)
”
TLDR Vertical mergers can lead to collusion, advertising often peaks then declines, and incumbents can disrupt new competitors.
This dissertation comprised three essays exploring different economic phenomena. The first essay examined how vertical mergers in a vertically separated industry could facilitate collusion among downstream firms by shortening production time. The second essay provided a theoretical explanation for the empirical observation that advertising expenditure for some new products follows an inverted U shape. The third essay analyzed how incumbents respond to new competitors, particularly when the entrant's quality is uncertain, showing that incumbents could disrupt the entrant's quality signaling. The dissertation concluded by summarizing the main findings of these essays.