Coexistence of Strategic Vertical Separation and Integration Forschungsschwerpunkt Marktprozeß Und Unter- Nehmensentwicklung Research Area Market Processes and Corporate Development Coexistence of Strategic Vertical Separation and Integration
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چکیده
Coexistence of Strategic Vertical Separation and Integration by Jos Jansen This paper gives conditions under which vertical separation is chosen by some upstream firms, while vertical integration is chosen by others in the equilibrium of a symmetric model. A vertically separating firm trades off fixed contracting costs against the strategic benefit of writing a (two-part tariff, exclusive dealership) contract with its retailer. Equilibrium coexistence emerges when observable and non-renegotiable contracts are offered to downstream Cournot oligopolists that supply close substitutes. The scope for equilibrium coexistence diminishes when assumptions on contract observability and commitment are relaxed. JEL Codes. L22, L42
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