In the German automobile industry the vertical integration, as an indicator of value added, is on average low. Beyond the argument of relative high labour costs for manufacturing, several specific reasons for the level of vertical integration, linked to the flexibility of business administration...

I develop and estimate a model of pricing and advertising decisions of new car manufacturers and dealers. The model highlights a selling effort externality between dealers and manufacturers, which leads to estimated manufacturer markups that are about half compared to those from a model that...

New airline models are generational developments. For a particular market segment, a new model will be introduced perhaps every thirty years. Any new model will contain many innovations over the older model it supplants. Developing these innovations into an airliner introduces uncertainties,...

In the German automobile industry the vertical integration, as an indicator of value added, is on average low. Beyond the argument of relative high labour costs for manufacturing, several specific reasons for the level of vertical integration, linked to the flexibility of business administration...

We investigate the role of mutual trust in long-term vertical relationships involving trades of complex goods. High complexity is associated with high contract incompleteness and hence the increased relevance of trust-based relational contracts. Contrary to expectations, we find that changes in...

I develop a general framework for markup and markdown estimation that allows for profit sharing along value chains without making assumptions on conduct between vertically related firms. I derive the conditions under which the markup and markdown estimates relate to the firms' equilibrium...

In this paper, we propose an example of successive oligopolies where the downstream firmsshare the same decreasing returns technology of the Cobb-Douglas type. We stress thedifferences between the conclusions obtained under this assumption and those resultingfrom the traditional example...

In this paper we analyze how the technology used by downstream firms can influence inputand output market prices. We show via an example that both these prices increase under adecreasing returns technology while the contrary holds when the technology is constant....

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...