Arbeitspapier

Strategic outsourcing revisited

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.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 0305

Klassifikation
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Firm Organization and Market Structure
Organization of Production
Contracting Out; Joint Ventures; Technology Licensing
Thema
Outsourcing
Duopol
Unvollkommener Wettbewerb
Spieltheorie
Theorie
Extensives Spiel

Ereignis
Geistige Schöpfung
(wer)
Buehler, Stefan
Haucap, Justus
Ereignis
Veröffentlichung
(wer)
University of Zurich, Socioeconomic Institute
(wo)
Zurich
(wann)
2003

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Buehler, Stefan
  • Haucap, Justus
  • University of Zurich, Socioeconomic Institute

Entstanden

  • 2003

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