Vertical product differentiation with subcontracting

The paper examines the effects of subcontracting on vertical product differentiation in a spatial competition model. It is shown that the level of differentiation is determined by the consignor’s bargaining power and the ratio of final product transport costs to the cost of the input contracted. Assuming that the consignor has total bargaining power, subcontracting will imply a reduction in quality and a greater difference between qualities.

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Year of publication:	2008-01
Authors:	Andaluz, Joaquín
Institutions:	Facultad de Economía y Empresa, Universidad de Zaragoza
Subject:	Subcontracting \| Vertical Product Differentiation \| Spatial Competition

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Extent:	application/pdf
Series:	Documentos de Trabajo.
Type of publication:	Book / Working Paper
Classification:	L14 - Transactional Relationships; Contracts and Reputation; Networks ; L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration ; D43 - Oligopoly and Other Forms of Market Imperfection ; C78 - Bargaining Theory; Matching Theory
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010627625