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We construct a model to show that outsourcing of a crucial input can occur even though it can be produced in-house at a … differentiation is small or the technological gap between two input producing firms is small, strategic outsourcing will occur …. Technology transfer in the form of patent sale will act as a commitment that the firm will outsource. While the outsourcing firm …
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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...
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This paper explores the impact of product liability on vertical product differentiation when product safety is perfectly observable. In a two-stage competition, duopolistic firms are subject to strict liability and segment the market such that a low-safety product is marketed at a low price to...
Persistent link: https://www.econbiz.de/10010507682
This paper explores the impact of product liability on vertical product differentiation when product safety is perfectly observable. In a two-stage competition, duopolistic firms are subject to strict liability and segment the market such that a low-safety product is marketed at a low price to...
Persistent link: https://www.econbiz.de/10010509593
Alliances between competitors where an established firm provides access to its marketing and distribution channels are an important real-world phenomenon. We analyze a market where an established firm, firm A, produces a product of well-known quality, and a firm with an unknown brand, firm B,...
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The seminal paper by Salant, Switzer and Reynolds (1983) showed that merger in a standard Cournot framework with linear demand and linear costs is not profitable unless a large majority of the firms are involved in the merger. However, many strategic aspects matter for firm competition such as...
Persistent link: https://www.econbiz.de/10013318548