IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Strategic Outsourcing between Rivals

  • Yutian Chen

    (Department of Economics, California State University)

Registered author(s):

    By outsourcing key intermediate goods to a downstream competitor, a firm can credibly reveals its future quantity of the final good to its competitor, therefore force the latter to act as a Stackelberg follower in the downstream market. As a result, whether outsourcing occurs or not depends on the nature of the downstream competition. If firms compete in quantities, outsourcing occurs only if it generates a sufficiently large efficiency gain. Instead, if firms compete in prices, outsourcing always occurs whenever there is potential efficiency gain.

    If 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.

    File URL: http://www.aeconf.net/Articles/Nov2010/aef110205.pdf
    Download Restriction: no

    File URL: http://down.aefweb.net/AefArticles/aef110205.pdf
    Download Restriction: no

    Article provided by Society for AEF in its journal Annals of Economics and Finance.

    Volume (Year): 11 (2010)
    Issue (Month): 2 (November)
    Pages: 301-311

    as
    in new window

    Handle: RePEc:cuf:journl:y:2010:v:11:i:2:p:301-311
    Contact details of provider: Web page: http://www.aeconf.net/

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Chen, Yongmin & Ishikawa, Jota & Yu, Zhihao, 2001. "Trade Liberalization and Strategic Outsourcing," Discussion Papers 2001-04, Graduate School of Economics, Hitotsubashi University.
    2. Haucap, Justus & Buehler, Stefan, 2003. "Strategic Outsourcing Revisited," Working Paper 15/2003, Helmut Schmidt University, Hamburg.
    3. Saloner, Garth, 1986. "The role of obsolescence and inventory costs in providing commitment," International Journal of Industrial Organization, Elsevier, vol. 4(3), pages 333-345, September.
    4. Arya, Anil & Mittendorf, Brian & Sappington, David E.M., 2008. "Outsourcing, vertical integration, and price vs. quantity competition," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 1-16, January.
    5. Chen, Yutian & Dubey, Pradeep & Sen, Debapriya, 2009. "Outsourcing induced by strategic competition," MPRA Paper 14899, University Library of Munich, Germany.
    6. Pio Baake & Jörg Oechssler & Christoph Schenk, 1999. "Explaining cross-supplies," Journal of Economics, Springer, vol. 70(1), pages 37-60, February.
    7. D. Lee Heavner, 2004. "Vertical Enclosure: Vertical Integration and the Reluctance to Purchase from a Competitor," Journal of Industrial Economics, Wiley Blackwell, vol. 52(2), pages 179-199, 06.
    8. Yossef Spiegel, 1993. "Horizontal Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 570-590, Winter.
    9. Shy, Oz & Stenbacka, Rune, 2003. "Strategic outsourcing," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 203-224, February.
    10. Anil Arya & Brian Mittendorf & David E. M. Sappington, 2008. "The Make-or-Buy Decision in the Presence of a Rival: Strategic Outsourcing to a Common Supplier," Management Science, INFORMS, vol. 54(10), pages 1747-1758, October.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:cuf:journl:y:2010:v:11:i:2:p:301-311. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qiang Gao)

    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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.