| Article ID: | iaor20013762 |
| Country: | Netherlands |
| Volume: | 130 |
| Issue: | 1 |
| Start Page Number: | 83 |
| End Page Number: | 89 |
| Publication Date: | Apr 2001 |
| Journal: | European Journal of Operational Research |
| Authors: | Reyniers Diane J. |
| Keywords: | economic order |
This paper investigates the effect on consumer price of a vertical merger between a monopolist manufacturer and his retailer, when inventory costs are taken into consideration. We find that the traditional result (lower prices) remains true only when inventory costs are sufficiently small. The direction of the price change also depends on the market size.