Some evidence suggests that virtual integration rather than vertical integration may be a more common source of market power.

Question

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Virtual integration, which involves coordinating activities through information technology rather than ownership, has been found to create significant efficiencies and competitive advantages in some industries. Therefore, it can be a source of market power for firms. Vertical integration, on the other hand, may not always lead to market power as it can be costly to manage and may not result in the desired synergies.

Some Evidence Suggests That Virtual Integration Rather Than Vertical Integration