Private incentives to vertical disintegration among firms with heterogeneous objectives
A vertically integrated monopoly is compared to a decentralized market arrangement where production is segmented. A Labor Managed firm produces an input used by a profit maximizer manufacturer of a final good. Unlike what usually occurs between homogeneous firms we find circumstances in which the decentralised vertical arrangement is privately superior to the integrated one.
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- Gene M. Grossman & Elhanan Helpman, 2002. "Integration versus Outsourcing in Industry Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 85-120.
- Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58, pages 347.
- John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
- Delbono, Flavio & Rossini, Gianpaolo, 1992. "Competition policy vs horizontal merger with public, entrepreneurial, and labor-managed firms," Journal of Comparative Economics, Elsevier, vol. 16(2), pages 226-240, June.
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