Please use this identifier to cite or link to this item:
Strategic Sourcing in the Presence of a Rival: To Make or To Buy from a Common Supplier
|Keywords: ||Strategic sourcing|
|Issue Date: ||2018-10-01 12:04:56 (UTC+8)|
|Abstract: ||Conventional wisdom suggests that downstream firms will not buy an input at a price exceeding the in-house cost of production. However, we show that competing downstream firms will pay a premium to outsource the input to a common supplier if the common supplier is efficient enough in producing the input. The decision of outsourcing is a double-edged sword for both downstream firms as it not only raises the cost of its rival but also the cost of the firm itself. Nevertheless, it pays for each downstream firm to outsource if the cost increase is more than offset by the gains from raising rival’s costs. Furthermore, we also show that there is a case in which each of the downstream firms makes a sourcing decision opposite to its rival if the input supplier is not as efficient as the previous case. Hence, the level of efficiency of the upstream supplier is the key to the decision-making of the downstream firms.|
|Reference: || Arya, A., Mittendorf, B., Sappington, D E. M., 2008. “The Make-or-Buy|
Decision in the Presence of a Rival: Strategic Outsourcing to a Common Supplier,” Management Science, 54: 1747-1758.
 Belandi, H., Mukherjee, A., 2012. “Market Structure and Strategic Bi-sourcing,” Journal of Economic Behavior and Organization, 82: 210-219.
 Cao, J., H., Mukherjee, A., Sinha, U B., 2018. “Firm-asymmetry and Strategic Outsourcing,” International Review of Economics and Finance, 53: 16-24.
 Chen, Y., 2011. “Strategic Sourcing for entry Deterrence and Tacit Collusion,” Journal of Economics, 102: 137-156.
 H¨ackner, J., 2000. “A Note on Price and Quantity Competition in Differentiated Oligopolies,” Journal of Economic Theory, 93: 233-239.
 H¨ackner, J., 2003. “Vertical Integration and Competition Policy,” Journal of Regulatory Economics, 24: 213-222.
|Source URI: ||http://thesis.lib.nccu.edu.tw/record/#G0105351025|
|Data Type: ||thesis|
|Appears in Collections:||[國際經營與貿易學系 ] 學位論文|
Files in This Item:
All items in 政大典藏 are protected by copyright, with all rights reserved.