Vertically integrated producer when a rival is also a customer: impact of demand uncertainty

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When a vertically integrated producer (VIP) is also a supplier of a component for its rival firm, it was found that the profit in a decentralized structure is higher for the VIP than the profit in a centralized structure under deterministic demand. In contrast, we found that firms' ordering decisions under uncertain demand can reverse this findings and it is more likely to happen as demand variability increases.
Publisher
ROUTLEDGE JOURNALS
Issue Date
2017-02
Language
English
Article Type
Article
Citation

APPLIED ECONOMICS LETTERS, v.24, no.3, pp.148 - 153

ISSN
1350-4851
DOI
10.1080/13504851.2016.1173170
URI
http://hdl.handle.net/10203/216083
Appears in Collection
MT-Journal Papers(저널논문)
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