Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263292 
Year of Publication: 
2021
Series/Report no.: 
ISER Discussion Paper No. 1155
Publisher: 
Osaka University, Institute of Social and Economic Research (ISER), Osaka
Abstract: 
We consider a downstream duopoly model with a monopolistic common supplier and mutual outsourcing between the two symmetric downstream firms. The market structure captures the recent procurement environment in the smartphone industry. We also incorporate managerial delegations into the duopoly model because deciding on organizational forms within a firm is critical to achieving better performance in almost all industries. There is an equilibrium in which only one of the firms delegates its downstream production to its sales manager. A delegating firm becomes less aggressive. The profits when both firms delegate can be higher than those when no firm delegates. The total surplus when both firms delegate is smaller than that when no firm delegates.
Subjects: 
Mutual outsourcing
Supplier
Delegation
Asymmetric managerial forms
JEL: 
L13
D43
Document Type: 
Working Paper

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