The make-or-buy choice in a mixed oligopoly: a theoretical investigation

Cellini, Roberto ; Lambertini, Luca (2007) The make-or-buy choice in a mixed oligopoly: a theoretical investigation. Bologna: Dipartimento di Scienze economiche DSE, p. 17. DOI 10.6092/unibo/amsacta/4632. In: Quaderni - Working Paper DSE (618). ISSN 2282-6483.
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Abstract

We take a game theory approach to study the make-or-buy decisions of firms in a mixed duopoly. We assume that a managerial firm and a profit-oriented firm compete in a duopoly market for a final good, and they can choose whether making an intermediate input or buying it from a monopolistic upstream firm. We find that different equilibria may arise, depending on parameter constellations. In particular, if the technology used for the production of the intermediate input is too costly, then the internal organization of firms at equilibrium is mixed, creating a conflict with social preferences that would always privilege vertical integration to outsourcing.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Cellini, Roberto
Lambertini, Luca
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ISSN
2282-6483
DOI
Deposit date
16 Feb 2016 14:22
Last modified
16 Feb 2016 14:22
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