Equilibrium structures in vertical oligopoly

The central purpose of this paper is to examine vertical integration as an equilibrium phenomenon. We model it as integration between Cournot oligopol ists in bath the upstream and the downstream stages. We consider the issue of private profitability versus collective profitability and show that unde r several situations the equilibrium outcomes may result in a Prisoner's di lemma, The analysis is extended to consider equilibrium outcomes in a dynam ic setting, where we find no integration to be a relatively common outcome. (C) 1998 Elsevier Science B.V. All rights reserved.