Chen, Yutian - In: Annals of Economics and Finance 11 (2010) 2, pp. 301-311
By outsourcing key intermediate goods to a downstream competitor, a firm can credibly reveals its future quantity of … a result, whether outsourcing occurs or not depends on the nature of the downstream competition. If firms compete in … quantities, outsourcing occurs only if it generates a sufficiently large efficiency gain. Instead, if firms compete in prices …