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In addition, we assume that this upstream firm can price discriminate between the retail firms which (now) own a stake in its capital and all of their retail rivals. We find that price discrimination is optimal and, compared to a vertical separation scenario, there is input foreclosure, a higher retail price, and lower social welfare, which suggests that, from a competition policy viewpoint, such partial vertical integrations should be analyzed with particular concern. On the other hand, incentives are such that conducting a private placement operation of the upstream firm\u2019s capital yields gains from trade, and we are able to identify the optimal characteristics of such an operation.<\/jats:p>","DOI":"10.1007\/s10842-023-00403-4","type":"journal-article","created":{"date-parts":[[2023,8,12]],"date-time":"2023-08-12T13:02:00Z","timestamp":1691845320000},"page":"101-122","update-policy":"https:\/\/doi.org\/10.1007\/springer_crossmark_policy","source":"Crossref","is-referenced-by-count":1,"title":["Backward Partial Vertical Integration Through Private Placement"],"prefix":"10.1007","volume":"23","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-8457-4479","authenticated-orcid":false,"given":"Ricardo","family":"Gon\u00e7alves","sequence":"first","affiliation":[]}],"member":"297","published-online":{"date-parts":[[2023,8,12]]},"reference":[{"key":"403_CR1","doi-asserted-by":"publisher","DOI":"10.1016\/j.econlet.2022.110376","volume":"213","author":"M Alipranti","year":"2022","unstructured":"Alipranti M, Petrakis E, Skartados P (2022) On the pro-competitive effects of passive partial backward ownership. 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