This paper demonstrates that the standard conclusions regarding the comparison of Cournot and Bertrand competition are reversed in a vertically related market with upstream monopoly and trading via two-part tariffs. In such a market, downstream Cournot competition yields higher output, lower...

This paper explores why competing firms can choose to outsource to an external common supplier that does not have a cost advantage in input production. The supplier, through its contract offers, manages to generate asymmetry, to alter product market competition, and to extract profits from the...

This paper explores the incentives of competing firms to outsource to a common supplier and shows that firms outsource even when the supplier does not have a cost advantage in input production. The suppliers contract offers generate cost asymmetry, alter product market competition, and improve...