An upstream monopoly with transport costs
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Natural monopoly
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Upstream-downstream problems are a class of problems in which activities occurring “upstream” are removed from their effects, which are felt “downstream.” A defining characteristic of these problems is that benefits and costs are asymmetrically distributed. Rivers are the archetypal setting in which these problems occur. This paper explores the case of the Kuskokwim River in Alaska where the utilization of natural resources has created a series of dynamic and interconnected upstream-downstream problems. Increased commercial salmon harvests, primarily in the lower river, have impacted subsistence fisheries. Record high salmon catches and salmon prices in 1988 allowed fishermen to capitalize boats and gear, facilitating their ability to travel upriver to hunt moose. These changes reconfigured upstream-downstream relationships, altered the fit of institutions to natural systems, led to new types of resource conflicts, created institutional challenges, and provide insights into institutional design.
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Natural monopoly
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Bargaining Power
Vertical Integration
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Downstream processing
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In an industry characterised by secret vertical contracts, we consider a benchmark case where two vertical chains exist, with two upstream manufacturers selling to two downstream retailers, and show that the equilibrium prices are independent of whether upstream or downstream firms have all the bargaining power. We then analyse two alternative mergers, and show that a downstream merger (which gives the downstream monopolist all the bargaining power) is more welfare detrimental than an upstream merger (which gives the bargaining power to the upstream monopolist). We also show that downstream and upstream mergers have the same effects when contracts are observable.
Bargaining Power
Vertical Integration
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Natural monopoly
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Xin’an River Basin,Pearl River Basin,and the Yangtze River Basin were taken as study areas to make multi-scale analysis of Water Environmental Kuznets Curve(WEKC).Relationships between waste water discharge and per Capita GDP of provinces in a river basin were plotted in a figure.Through empirical analysis of WEKC in different regions from small to large scale watersheds,it could be discovered that the WEKC curves roughly follow a principle of repeating step by step from downstream to upstream districts.The curve experienced in the downstream usually reoccurs in the upstream later.The principle is evident especially when there are obvious disparities among development levels of the upstream and downstream.The main reason for this principle is possibly that economic development in downstream areas is generally earlier than the upstream.Consequently,the downstream areas usually possess stronger environmental protection capacity.So the downstream reaches the peak value of WEKC earlier than the upstream.The principle contributes to further understanding of the importance of upstream water resources protection.With background of West Development and Middle Rising Policies,this discovery also illuminates that upstream environmental protection capacity should be strengthened with supports of the country and downstream areas to promote entire and long term watershed protection.
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The decision strategies on merger of the upstream and dowstream firms in an industry are discussed in this paper. A competition model with two firms in both upstream and downstream is established. The analysis will show that when the upstream and downstream enterprises take the horizontal and vertical merging as strategies variables, the subgame perfect equilibrium is the upstream and downstream enterprises' horizontal merger respectively. Furthermore, the paper focuses on the conflict of interests among the enterprises, the government and the consumers in the merger.
Subgame perfect equilibrium
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