Double Marginalization and Privatization in Liquor Retailing

Double Marginalization and Privatization in Liquor Retailing The purpose of this paper is to examine the price andstore count predictions of the spatial and non-spatialmodels of vertical integration between an upstreammonopolist and a downstream monopolisticallycompetitive retail industry using data from Alberta'srecently privatized liquor retailing industry. Thisindustry, which had been a government owned monopoly,became monopolistically competitive underprivatization. The models predict that verticaldisintegration will lead to higher retail prices andan increase in the store count in markets that cansupport multiple stores. Both predictions aresupported by liquor store count and price data. Review of Industrial Organization Springer Journals

Double Marginalization and Privatization in Liquor Retailing

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Kluwer Academic Publishers
Copyright © 2000 by Kluwer Academic Publishers
Economics; Industrial Organization; Microeconomics
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