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.
- Language
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Englisch
- Bibliographic citation
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Series: Diskussionspapier ; No. 15
- Classification
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Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Contracting Out; Joint Ventures; Technology Licensing
Organization of Production
Firm Organization and Market Structure
- Subject
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Outsourcing
Duopol
Unvollkommener Wettbewerb
Spieltheorie
Theorie
- Event
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Geistige Schöpfung
- (who)
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Buehler, Stefan
Haucap, Justus
- Event
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Veröffentlichung
- (who)
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Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre
- (where)
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Hamburg
- (when)
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2003
- Handle
- URN
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urn:nbn:de:gbv:705-opus-1486
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Buehler, Stefan
- Haucap, Justus
- Universität der Bundeswehr Hamburg, Fächergruppe Volkswirtschaftslehre
Time of origin
- 2003