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This paper analyzes a sequential game where firms decide about outsourcing the production of a non-specific input good … Tirole (1984) to characterize the different equilibria. We find that outsourcing generally softens competition in the final … product market. If firms anticipate the impact of their outsourcing decisions on input prices, there may be equilibria where …
Persistent link: https://www.econbiz.de/10001783571
There are more and more industries in which firms are specialized in the production of a component of the final good. This is especially true in high-tech industries. The basic question is why don't these firms merge? We paradoxically show that industries which are typical candidates for...
Persistent link: https://www.econbiz.de/10011596910
This paper introduces a number of game-theoretic tools to model collusive agreements among firms in vertically differentiated markets. I firstly review some classical literature on collusion between two firms producing goods of exogenous different qualities. I then extend the analysis to a...
Persistent link: https://www.econbiz.de/10011660599
It has been shown in prior research that cost effectiveness in the competitive emissions permit market could be affected by tacit collusion or price manipulation when the corresponding polluting product market is oligopolistic. We analyze these cross market links using a Stackelberg model to...
Persistent link: https://www.econbiz.de/10010476200
In a context of product innovation, we study two-part tariff licensing between a patentee and a potential rival which compete in a differentiated product market characterized by network externalities. The latter are shown to crucially affect the relative profitability of Cournot vs. Bertrand...
Persistent link: https://www.econbiz.de/10012306713
Globally and locally, government support policies for green goods (like renewable energy) are much more popular internationally than raising the cost of bads (as through carbon taxes). These support policies may encourage downstream consumption (renewable energy deployment) or upstream...
Persistent link: https://www.econbiz.de/10011457645
This paper analyses the reasons behind India lagging behind East and South East Asian economies in participating in international production networks, on which growth in manufacturing has become increasingly dependent in the contemporary world. Since multinational firms are the main coordinating...
Persistent link: https://www.econbiz.de/10010404655
This paper investigates the determinants of vertical integration. We first derive a number of predictions regarding the relationship between technology intensity and vertical integration from a simple model with nancial imperfections andincomplete contracts. Then, we investigate these...
Persistent link: https://www.econbiz.de/10005857773
Persistent link: https://www.econbiz.de/10012100357
differentiation when customers are concerned about environmental aspects of the good. We use the spatial duopoly model to determine …
Persistent link: https://www.econbiz.de/10011591898