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dc.contributor.authorSliwka, Dirken_US
dc.date.accessioned2009-01-28T16:11:36Z-
dc.date.available2009-01-28T16:11:36Z-
dc.date.issued2003en_US
dc.identifier.urihttp://hdl.handle.net/10419/20099-
dc.description.abstractThe costs of vertical integration are analyzed within a game-theoretic signaling model. It is shown that a company when being vertically integrated with a supplier may well decide to buy certain components from this supplier even at a lower quality than that offered by external sources. When the parent company decides to stop buying components from the integrated supplier, the value of the ownership share in the supplier is reduced: On the one hand, the supplier?s profit from the transactions with its parent is foregone. But on the other hand, other clients may decide against buying from this supplier as the latter?s reputation for providing an appropriate quality is damaged. The loss in value of the ownership share may outweigh the loss due to the lower quality. The anticipation of this effect leads to reduced ex ante incentives for the supplier?s management to raise quality. A spin-off may therefore be beneficial as it strengthens incentives. Costs and benefits of vertical integration are analyzed and consequences for vertically integrated companies organized in profit centers are discussed.en_US
dc.language.isoengen_US
dc.publisheren_US
dc.relation.ispartofseriesIZA Discussion paper series 856en_US
dc.subject.jelM55en_US
dc.subject.jelL22en_US
dc.subject.jelC22en_US
dc.subject.ddc330en_US
dc.subject.keywordvertical integrationen_US
dc.subject.keywordincentivesen_US
dc.subject.keywordoutsourcingen_US
dc.subject.keywordsignalingen_US
dc.subject.stwVertikale Konzentrationen_US
dc.subject.stwLieferanten-Kunden-Beziehungen_US
dc.subject.stwOutsourcingen_US
dc.subject.stwÖkonomischer Anreizen_US
dc.subject.stwProduktqualitäten_US
dc.subject.stwSignallingen_US
dc.subject.stwPrestigeen_US
dc.subject.stwUnternehmenswerten_US
dc.subject.stwKosten-Nutzen-Analyseen_US
dc.subject.stwProfit Centeren_US
dc.subject.stwTheorieen_US
dc.titleManagement Incentives, Signaling Effects and the Costs of Vertical Integrationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn368840859en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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