We examine that the bilateral supplier affects the incentive contracts that owners of retailers offer their managers, assuming that the manufacturer sets the input price after observing the terms of the incentive contracts offered to management in the downstream market. Thus, we compare the two...

Using two-part tariff under mutual outsourcing between symmetric downstream firms, we demonstrate endogenous choice of vertical structure with each exclusive channel. Recent market structure captures that the mutual outsourcing has become a common business practice in technology intensive...