On the Economics of Subcontracting
AbstractIn a situation where firms compete for a contract of an agency and subcontract part of this contract it is shown that: (i) If the timing of subcontracting is determined by the firms,then the more efficient firms subcontract after the award, while the less efficient firms subcontract before the award. (ii) Depending on the market structure, using a Dutch auction can be preferable to an English auction when subcontracting takes place before the award. (iii) To foster competition among subcontractors, a firm should not always subcontract even if subcontractors are cheaper than producing in-house. (iv) The agency when deciding on the timing of subcontracting faces a trade-off between a competition enhancing effect and an efficiency effect.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 96 (2006)
Issue (Month): 1 (January-February)
Contact details of provider:
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statistics
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Adriana Leo).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.