This paper examines the role of dual sourcing (e.g., outside options) in vertical and horizontal relations. In a bilateral monopoly market, if either the upstream or downstream firm has outside options, the other firm could lose from seemingly positive shocks, e.g., market expansion or...

This paper examines the role of outside options in a downstream duopoly with exclusive vertical relations as in the Japanese automobile industry. In our setup, the downstream firms have outside options, and two upstream firms with exclusive relations can engage in cost reducing investments. More...

It is known that small firms rely mainly on the CEO’s individual knowledge for developing innovations. Recent work suggests that this approach is inefficient since it underutilizes other employees’ knowledge. We study to which extent using CEOs, managers and non-managerial employees’ ideas...

Employee resistance against innovations is a virulent phenomenon and there is a broad theoretical literature on its determinants. The empirical evidence is scarce, however, and mainly provides descriptive evidence on the incidence of the phenomenon and concentrates on the effectiveness of change...

This paper examines the questions of who participates in the provision of a public good through the voluntary participation of agents in the presence of strong complementarity between a public good and a private good. We show that the greater the initial endowment of the private good that agents...

Much of today’s software relies on programming code shared openly online. Yet, it is unclear why volunteer developers contribute to open-source software (OSS), a public good. We study OSS contributions of some 22,900 developers worldwide on the largest online code repository platform, GitHub,...

We provide a simple model to investigate decisions on vertical integration/separation. The key feature of this model is that more than one input is required for the final products of the local downstream monopolists. Depending on their cost structure, downstream firms' decisions on vertical...

We provide a simple model to investigate decisions about vertical separation. The key feature of this model is that more than one input is required for the final product of the downstream monopolist. We show that as the bargaining powers of independent complementary input suppliers grow larger,...

Multivariate Tobit models are estimated using German cross-sectional data to test whether strategic complementarities exist between expenditures in four different types of ICT-components. If two ICT-components are complements, they are correlated (provided that agents act rationally)....

This paper studies how a retailer decides the length of product line in a vertically related industry. We study a market with two product varieties. Each retailer decides the number of varieties it procures from an upstream manufacturer. The manufacturer may open an online store and encroach on...