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The vertical organization of production entails a range of make-or-buy decisions of intermediate goods that are influenced by the difficulty of writing contracts with a potential supplier. When contracting causes high transaction costs, a firm can decide to vertically integrate the production of...
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This paper characterizes the optimal contracts issued to suppliers when delivery is subject to disruptions and when they can invest to reduce such a risk. When investment is contractible dual sourcing is generally optimal because it reduces the risk of disruption. The manufacturer (buyer) either...
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unit data control grants flexibility to react to rapidly changing environments. Many data standardization efforts fail … because they do not fully take into account the value of flexibility and ownership incentives. We use a real options based … flexibility, which is an intangible information asset. Second the derived propositions would help senior management to more …
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