Permanent URL to this publication: http://dx.doi.org/10.5167/uzh-52177
Buehler, Stefan; Haucap, Justus (2003). Strategic Outsourcing Revisited. Working paper series / Socioeconomic Institute No. 305, University of Zurich.
This paper analyzes a sequential game where firms decide about outsourcing the production of a non-specific input good to an imperfectly competitive input market. We apply the taxonomy of business strategies introduced by Fudenberg and Tirole (1984) to characterize the different equilibria. We find that outsourcing generally softens competition in the final product market. If firms anticipate the impact of their outsourcing decisions on input prices, there may be equilibria where firms outsource so as to collude or to raise rivals’ costs. We illustrate our analysis using a linear Cournot model.
410 downloads since deposited on 29 Nov 2011
108 downloads since 12 months
|Item Type:||Working Paper|
|Communities & Collections:||03 Faculty of Economics > Department of Economics
Working Paper Series > Socioeconomic Institute (former)
|Dewey Decimal Classification:||330 Economics|
|JEL Classification:||D43, L22, L23, L24|
|Deposited On:||29 Nov 2011 22:32|
|Last Modified:||05 Apr 2016 15:11|
|Series Name:||Working paper series / Socioeconomic Institute|
Users (please log in): suggest update or correction for this item
Repository Staff Only: item control page