Vertical integration and market foreclosure

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This project analyzes effects of vertical integrations on market outcomes. Specifically, I empirically examine the relative size of the efficiency and foreclosure effects of vertical integrations in the US cable television industry for the purpose of understanding the welfare implication of vertical integration. The analysis finds that market prices were dropped due to the merger in the industry, suggesting that there might have been an improvement in efficiency. However, the preference for own channels by the integrated cable television company persisted despite a lower quality of channel bundles; efficiency gains from the merger were not passed on to consumers.