It is widely believed that vertical integration in an environment without foreclosure, or more generally without any mechanism that restricts competition among firms, raises the welfare of consumers. In this paper we show that this can be overturned in a standard setting. We consider a vertical...

In a model with manufacturer and retailer competition, we show that RPM facilitates manufacturer cartels when retailers have an outside option to selling the manufacturer's product. Because retailers have an effective outside option, the manufacturer can only ensure contract acceptance by...

In a market with two exclusive manufacturer-retailer pairs, we show that colluding manufacturers may not be able to attain supra-competitive profits when contracts with retailers are secret. The stability of manufacturer collusion depends on the retailers' beliefs. We consider various dynamic...

This paper provides a novel theory of research joint ventures for financially constrained firms. When firms choose R&D portfolios, an RJV can help to coordinate research efforts, reducing investments in duplicate projects. This can free up resources, increase the variety of pursued projects and...

This paper analyzes a sequential game where firms decide about outsourcing the production of a non-specific input good to an imperfectly competitive input market. We apply the taxonomy of business strategies introduced by Fudenberg and Tirole (1984) to characterize the different equilibria. We...

We analyze the endogenous formation of R&D networks, where firms are active in different product markets and can benefit from R&D spillovers form collaborating firms within or across different industries. R&D spillovers help firms to introduce process innovations to lower their production costs....

We study production networks where firms' products can be described by a set of input and output characteristics, and links are formed only if the output characteristics of a seller match the input characteristics of a customer. We introduce a fully endogenous network formation model with...

The make-or-buy decision is analyzed in a three-layer principal-management-agent model. There is a cost-saving/quality tradeoff in effort provision. The principal faces the choice between employing an in-house management and contracting with an independent management; the cost-saving incentives...

The make-or-buy decision is analyzed in a simple framework combining contractual incompleteness with the existence of imperfect but contractible performance measures. Contractual incompleteness gives rise to two regimes, identified with make and buy. The performance measure on which...

The make-or-buy decision is analyzed in a simple two-task principal-agent model. There is a cost-saving/quality tradeoff in effort provision. The principal faces a dichotomous choice between weak ("make") and strong ("buy") cost-saving incentives for the agent; the dichotomy is due to an...