The anti-competitive effect of vertical integration is a main issue discussed in antitrust field. Based on the characteristics of Chinese aluminum industry and the vertical merging behavior of Chinalco, this paper discusses the anti-competitive effect of forward integration by a two-phase game model with upstream monopoly firms. The result shows that vertical integration has obvious foreclosure effect on the other downstream independent firms when Chinalco merged with downstream aluminum firms. But, this effect became weaker when the monopoly degree of Chinalco in upstream market is reduced. T...
