The optimal design of two-part tariffs is investigated in a dynamic model where two firms belonging to the same supply chain invest in R&D activities to increase the quality of the final product. It is shown that the replication of the vertically integrated monopolist's performance can be...

Zaccour (2008) investigates the behaviour of a marketing channel where firms invest in advertising to increase brand equity, showing that an exogenous twopart tariff cannot be used to replicate the vertically integrated monopolist's performance. I revisit the same model proving the existence of...

Vertical integration (VI) may show social superiority over vertical disintegration (VD) if there is an opportunity of internalizing most of the externalities affecting vertical arm's length relationships. When enterprises carry out process innovating R&D (PIRD), VI turns out to be quite often...