Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2025-08-26
Number: 25-046/VII
Author-Name: Sander Onderstal
Author-Workplace-Name: University of Amsterdam and Tinbergen Institute
Author-Name: Ruben van Oosten
Author-Workplace-Name: University of Amsterdam
Title: Vertical Integration in Auction Markets
Abstract: We analyze vertical integration in auction markets using a symmetric independent private-values model where the auctioneer invests in the auctioned object's quality. We find that the auctioneer invests more after integration. The integrated bidder enjoys a bidding advantage over other bidders. The merging parties benefit from integration, while non-merging bidders are worse off. In a platform setting where the auctioneer is an intermediary and the bidders are sellers on her platform, vertical integration has ambiguous effects on consumer surplus and total welfare. Our results contribute to the ongoing policy debate about platforms self-preferencing, effective competition policy, and digital market regulation.
Classification-JEL: D44, G34
Keywords: 
File-URL: https://papers.tinbergen.nl/25046.pdf
File-Format: application/pdf
File-Size: 4.420.550 bytes
Handle: RePEc:tin:wpaper:20250046