Álvaro E. BustosAlexander Galetovic2026-03-222026-03-22200910.2202/1935-1682.2172https://doi.org/10.2202/1935-1682.2172https://andeanlibrary.org/handle/123456789/48592Citaciones: 14Abstract We study the vertical integration and sabotage decisions of a regulated bottleneck monopoly that sells "access" to independent firms and may own a subsidiary downstream. We extend the literature in four directions by: (i) endogenizing vertical integration and linking it with the intensity of vertical economies or diseconomies à la Kaserman and Mayo (1991); (ii) systematically studying how vertical economies and diseconomies affect the intensity of sabotage; (iii) showing that the intensity of sabotage is determined by either a standard Lerner condition augmented by the direct cost of sabotage or a relation between the market share of the subsidiary and the elasticity of the derived demand for access; and (iv) systematically examining the welfare effect of vertical integration.enDiseconomies of scaleVertical integrationBottleneckMonopolyEconomicsMicroeconomicsElasticity (physics)WelfarePrice elasticity of demandIndustrial organizationarticle