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Second Sourcing

Author

Listed:
  • Michael H. Riordan
  • David E.M. Sappington

Abstract

In a multistage model of defense procurement we show that a second source of production is often of limited value. In many instances, second sourcing will result in strictly less expected welfare than is generated by sole sourcing.

Suggested Citation

  • Michael H. Riordan & David E.M. Sappington, 1989. "Second Sourcing," RAND Journal of Economics, The RAND Corporation, vol. 20(1), pages 41-58, Spring.
  • Handle: RePEc:rje:randje:v:20:y:1989:i:spring:p:41-58
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    Cited by:

    1. Bonaccorsi, Andrea & Giuri, Paola, 2000. "When shakeout doesn't occur: The evolution of the turboprop engine industry," Research Policy, Elsevier, vol. 29(7-8), pages 847-870, August.
    2. Anastassios Gentzoglanis, 2002. "Privatization, Investment and Efficiency in the Telecommunications Industry: Theory and Empirical Evidence from MENA Countries," Working Papers 0230, Economic Research Forum, revised 10 Oct 2002.
    3. Isabelle Brocas, 2005. "Multistage Contracting with Applications to R&D and Insurance Policies," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(2), pages 317-346, May.
    4. Marc Guyot & Radu Vranceanu, 1997. "Quelle réglementation pour le secteur de la Défense : l'expérience américaine," Revue Française d'Économie, Programme National Persée, vol. 12(3), pages 167-193.
    5. McGuire, Thomas G. & Riordan, Michael H., 1995. "Incomplete information and optimal market structure public purchases from private providers," Journal of Public Economics, Elsevier, vol. 56(1), pages 125-141, January.
    6. Dalen, D.M. & von der Fehr, N.-H.M. & Moen, E.R., 1998. "Regulation and Wage Bargaining," Memorandum 13/1998, Oslo University, Department of Economics.
    7. Rey, Patrick & Salant, David, 2017. "Allocating essential inputs," TSE Working Papers 17-820, Toulouse School of Economics (TSE), revised Jun 2019.
    8. William P. Rogerson, 1993. "Economic Incentives and the Defense Procurement Process," Discussion Papers 1078, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Mérel, Pierre & Sexton, Richard J., 2017. "Buyer power with atomistic upstream entry: Can downstream consolidation increase production and welfare?," International Journal of Industrial Organization, Elsevier, vol. 50(C), pages 259-293.
    10. Li, Sanxi & Sun, Hailin & Yan, Jianye & Yu, Jun, 2015. "Bundling decisions in procurement auctions with sequential tasks," Journal of Public Economics, Elsevier, vol. 128(C), pages 96-106.
    11. Armstrong, Mark & Sappington, David E.M., 2007. "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 27, pages 1557-1700, Elsevier.

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