Outsourcing, vertical integration, and price vs. quantity competition

Arya, Anil; Mittendorf, Brian; Sappington, David E. M.

doi:10.1016/j.ijindorg.2006.10.006

Cited by 156 publications

(149 citation statements)

References 22 publications

(22 reference statements)

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“…First, U bargains with each D i over the terms of a two-part tari¤ contract, i.e., over a wholesale price, w i , and a …xed fee, after observing each other's contract terms. 5 2 An exception is Arya et al (2008) which similar to us …nd that Cournot competition results into more competitive and e¢ cient outcomes than Bertrand competition. However, the driving forces behind their results, as well as the model that they use are thoroughly di¤erent from ours: they consider a market consisting of a vertically integrated …rm and a non-integrated downstream rival.…”

Section: The Modelmentioning

confidence: 50%

“…Dastidar (1997) and Häckner (2000), instead, pointed out the sensitivity of the results in Singh and Vives to the sharing rules governing oligopoly and to the type of product di¤erentiation. 1 We demonstrate that the standard conclusions about price and quantity competition can be altered in the context of a vertically related market. In particular, we show that downstream Cournot competition yields more competitive market outcomes than downstream Bertrand competition-it yields higher output and lower prices.…”

Section: Introductionmentioning

confidence: 87%

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Price vs. quantity competition in a vertically related market

2014

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor. Cournot competition yields higher output, lower wholesale prices, lower …nal prices, higher consumers'surplus, and higher total welfare than Bertrand competition. Terms of use: Documents in

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Section: The Modelmentioning

confidence: 50%

Section: Introductionmentioning

confidence: 87%

Price vs. quantity competition in a vertically related market

2014

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“…As far as we have known, Bylka et al and Singh et al were the first to analyse the mixed Cournot-Bertrand game [19,20]. Häckner, Zanchettin and Arya et al pointed that in some cases Cournot-Bertrand competition may be optimal [21][22][23]. [24] studied a Cournot-Bertrand mixed duopoly competitive game model with limited information about the market.…”

Section: Literature Reviewmentioning

confidence: 99%

Simulation on the Complementary Product Strategy Based on the Cournot-Bertrand Mixed Game Model

Huang¹,

Liu²,

Qi³

2014

Int. j. simul. model.

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In this article, we report the results of a study that explores an output-pricing game model in a complex system which comprises two main manufacturers and two complementary product enterprises. First, optimization method is used to study the influence of parameters on the optimal decisions of the model. Second, a dynamic game model and a controlled model are established in order to analyse the system's dynamic characteristics in disequilibrium state by dynamic simulation. The simulation results show that the increase of product substitutability will be unfavourable to all members of the complex system, enterprises should control the product's complementarity thus can they obtain maximum profit respectively. In addition, enterprises in the system can reach Nash Equilibrium, but complementary enterprises are lack of cooperation enthusiasm with the increase of substitutability of main product. The complex characteristics of the model with the change of parameters is exhibited by dynamic simulation, and the stability of variables will change when the parameters taking different values. The results can provide references for managers in variable adjustment, choice of complementary product strategy and product design, etc.

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“…1 We investigate both a symmetric and asymmetric framework. We …rst consider the case in which the IPJV is left totally independent of the owners and pursues its objective, namely it maximizes its own pro…t obtained in the U section.…”

Section: Introductionmentioning

confidence: 99%

Pitfalls in Vertical Arrangements

Rossini

Vergari

2010

SSRN Journal

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A popular way of obtaining essential inputs requires the establishment of an input production joint venture (IPJV) in the upstream (U) section of the vertical chain of production by …rms competing and selling …nal goods in the downstream (D) section of the vertical chain. In spite of the apparently simple arrangement there are many possible governances for the management of the IPJV according to the ownership structure and to the degree of delegation granted to the IPJV by parent …rms. We explore the best sustainable governance arrangement for the IPJV. We address this question in a duopoly framwork and we …nd a large area of impossible vertical arrangements associated with technological asymmtery. The most likely governance of the vertical arrangment associated to the IPJV is total independence.JEL codes: L24, L42

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Outsourcing, vertical integration, and price vs. quantity competition

Cited by 156 publications

References 22 publications

Price vs. quantity competition in a vertically related market

Price vs. quantity competition in a vertically related market

Simulation on the Complementary Product Strategy Based on the Cournot-Bertrand Mixed Game Model

Pitfalls in Vertical Arrangements

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