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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...
Persistent link: https://www.econbiz.de/10011422165
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...
Persistent link: https://www.econbiz.de/10012972275
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,...
Persistent link: https://www.econbiz.de/10012915588
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...
Persistent link: https://www.econbiz.de/10003592932
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...
Persistent link: https://www.econbiz.de/10014556693
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...
Persistent link: https://www.econbiz.de/10014631791
Persistent link: https://www.econbiz.de/10011563592
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...
Persistent link: https://www.econbiz.de/10005868680
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....
Persistent link: https://www.econbiz.de/10005868754
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