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Corrections Tables and Vertical Integration

Corrections Tables and Vertical Integration

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Published by Joshua Gans
Catherine De Fontenay and Joshua Gans, "Corrections of Tables 1 and 2" for "Vertical Integration in the Presence of Upstream Competition," RAND Journal of Economics, Vol.36, No.3, 2005, pp.544-572
Catherine De Fontenay and Joshua Gans, "Corrections of Tables 1 and 2" for "Vertical Integration in the Presence of Upstream Competition," RAND Journal of Economics, Vol.36, No.3, 2005, pp.544-572

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Published by: Joshua Gans on Dec 08, 2009
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01/31/2010

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Table 1: Payoffs with no externalities
1
Upstream Competition Upstream Monopoly (
A
owns
B
)
v
D
1
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)
v
D
1
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)+ Π(
D
1
A
B
) + Π(
D
1
A
)
3Π(
D
2
B
) + Π(
D
1
A
B
) + Π(
D
1
A
)+
x
Π(
D
1
D
2
B
)
Π(
D
2
B
) + Π(
D
1
B
)
+ (1
y
)Π(
D
1
D
2
B
)
3
y
Π(
D
2
A
B
)+
y
3
Π(
D
2
A
B
)
Π(
D
2
B
)
Π(
D
2
A
)
y
Π(
D
2
A
) + (1
y
)Π(
D
1
B
)
v
D
2
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)
v
D
2
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)
3Π(
D
1
A
B
)
Π(
D
1
A
) + 3Π(
D
2
B
)
3Π(
D
1
A
B
)
Π(
D
1
A
)+
x
Π(
D
1
D
2
B
)
Π(
D
2
B
)
Π(
D
1
B
)
+ (1
y
)Π(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
) + Π(
D
2
A
)
+
y
Π(
D
2
A
)
(1
y
)Π(
D
1
B
)
v
A
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)
v
A
=
112
3Π(
D
1
D
2
A
B
) + Π(
D
1
D
2
A
)+ Π(
D
1
A
B
) + Π(
D
1
A
)
3Π(
D
2
B
) + Π(
D
1
A
B
) + Π(
D
1
A
)+
x
3
Π(
D
1
D
2
B
)
Π(
D
2
B
)
Π(
D
1
B
)
3(1
y
)Π(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
) + Π(
D
2
A
)
+
y
Π(
D
2
A
)
(1
y
)Π(
D
1
B
)
v
B
=
112
3Π(
D
1
D
2
A
B
)
3Π(
D
1
D
2
A
)
v
B
=
112
3Π(
D
1
D
2
A
B
)
3Π(
D
1
D
2
A
)+ Π(
D
1
A
B
)
Π(
D
1
A
) + 3Π(
D
2
B
) + Π(
D
1
A
B
)
Π(
D
1
A
)+
x
Π(
D
1
D
2
B
)
Π(
D
2
B
) + Π(
D
1
B
)
+ (1
y
)Π(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
)
Π(
D
2
A
)
y
Π(
D
2
A
) + (1
y
)Π(
D
1
B
)
∂ 
(
ν
D
1
+
ν
UA
)
∂ 
(
x
)
=
16
Π(
D
1
D
2
B
)
Π(
D
2
B
)
∂ 
(
ν
D
1
+
ν
UA
)
∂ 
(
x
)
= 0
∂ 
(
ν
D
1
+
ν
UA
)
∂ 
(
y
)
=
16
Π(
D
2
A
B
)
Π(
D
2
B
)
∂ 
(
ν
D
1
+
ν
UA
)
∂ 
(
y
)
=
16
Π(
D
2
A
B
)
Π(
D
1
D
2
B
)
1
Where (
x,y
) = (1
,
1) for NI, (0
,
1) for FI, and (1
,
0) for BI.
1
 
Table 2: Payoffs in competitive externalities case
1
Upstream Competition Upstream Monopoly (
A
owns
B
)
v
D
1
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
v
D
1
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
+ (1
xy
)
3ˆˆΠ
UC 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
+ (1
xy
)+ Π(
D
1
A
B
)
2Π(
D
1
A
) + 3Π(
D
1
B
)
3Π(
D
2
A
)
×
3ˆˆΠ
UM 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
+ 3Π(
D
1
A
,D
2
B
)
3Π(
D
2
B
,D
1
A
) + Π(
D
1
A
B
) + Π(
D
1
A
)+
x
ˆΠ(
D
1
D
2
B
)
Π(
D
2
B
)
2Π(
D
1
B
) + 3Π(
D
2
A
)
+ (1
y
)ˆΠ(
D
1
D
2
B
)
3
y
Π(
D
2
A
B
)+
y
3Π(
D
2
A
B
) + 3Π(
D
2
B
) + 2Π(
D
2
A
)
3Π(
D
1
B
)
y
Π(
D
2
A
) + (1
y
)Π(
D
1
B
)
+
xy
3Π(
D
1
B
,D
2
A
)
3Π(
D
2
A
,D
1
B
)
v
D
2
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
v
D
2
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
+ (1
xy
)
3ˆˆΠ
UC 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
+ (1
xy
)
3Π(
D
1
A
B
) + 2Π(
D
1
A
)
3Π(
D
1
B
) + 3Π(
D
2
A
)
×
3ˆˆΠ
UM 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
3Π(
D
1
A
,D
2
B
) + 3Π(
D
2
B
,D
1
A
)
3Π(
D
1
A
B
)
Π(
D
1
A
)+
x
ˆΠ(
D
1
D
2
B
)
Π(
D
2
B
) + 2Π(
D
1
B
)
3Π(
D
2
A
)
+ (1
y
)ˆΠ(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
)
2Π(
D
2
A
) + 3Π(
D
1
B
)
+
y
Π(
D
2
A
)
(1
y
)Π(
D
1
B
)
+
xy
3Π(
D
1
B
,D
2
A
) + 3Π(
D
2
A
,D
1
B
)
v
A
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
v
A
=
112
xy
3ˆΠ(
D
1
D
2
A
B
) +ˆΠ(
D
1
D
2
A
)
+ (1
xy
)
3ˆˆΠ
UC 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
+ (1
xy
)+ Π(
D
1
A
B
)
2Π(
D
1
A
)
3Π(
D
1
B
) + 3Π(
D
2
A
)
×
3ˆˆΠ
UM 
(
D
1
D
2
A
B
) +ˆˆΠ(
D
1
D
2
A
)
+ 3Π(
D
1
A
,D
2
B
)
3Π(
D
2
B
,D
1
A
) + Π(
D
1
A
B
) + Π(
D
1
A
)+
x
3ˆΠ(
D
1
D
2
B
) + 3Π(
D
2
B
) + 2Π(
D
1
B
)
3Π(
D
2
A
)
3(1
y
)ˆΠ(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
)
2Π(
D
2
A
) + 3Π(
D
1
B
)
+
y
Π(
D
2
A
)
(1
y
)Π(
D
1
B
)
+
xy
3Π(
D
1
B
,D
2
A
) + 3Π(
D
2
A
,D
1
B
)
v
B
=
112
xy
3ˆΠ(
D
1
D
2
A
B
)
3ˆΠ(
D
1
D
2
A
)
v
B
=
112
xy
3ˆΠ(
D
1
D
2
A
B
)
3ˆΠ(
D
1
D
2
A
)
+ (1
xy
)
3ˆˆΠ
UC 
(
D
1
D
2
A
B
)
3ˆˆΠ(
D
1
D
2
A
)
+ (1
xy
)+ Π(
D
1
A
B
) + 2Π(
D
1
A
) + 3Π(
D
1
B
)
3Π(
D
2
A
)
×
3ˆˆΠ
UM 
(
D
1
D
2
A
B
)
3ˆˆΠ(
D
1
D
2
A
)
3Π(
D
1
A
,D
2
B
) + 3Π(
D
2
B
,D
1
A
) + Π(
D
1
A
B
)
Π(
D
1
A
)+
x
ˆΠ(
D
1
D
2
B
)
Π(
D
2
B
)
2Π(
D
1
B
) + 3Π(
D
2
A
)
+ (1
y
)ˆΠ(
D
1
D
2
B
) +
y
Π(
D
2
A
B
)+
y
Π(
D
2
A
B
)
Π(
D
2
B
) + 2Π(
D
2
A
)
3Π(
D
1
B
)
y
Π(
D
2
A
) + (1
y
)Π(
D
1
B
)
+
xy
3Π(
D
1
B
,D
2
A
)
3Π(
D
2
A
,D
1
B
)
2

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