EconPapers    
Economics at your fingertips  
 

Endogenous timing when a vertically integrated producer supplies a rival

Anil Arya () and Brian Mittendorf
Additional contact information
Anil Arya: Ohio State University
Brian Mittendorf: Ohio State University

Journal of Regulatory Economics, 2018, vol. 54, issue 2, 105-123

Abstract: Abstract This paper derives the timing equilibrium when a vertically integrated producer (VIP) supplies essential inputs to its retail rival. Such circumstances arise in a variety of industries, often characterized by regulated input prices. The distinguishing feature of markets with an influential VIP is that the VIP is not only a retail competitor but is also concerned about wholesale profits–profits it gleans from its retail rival(s). The VIP’s desire to balance profits across wholesale and retail markets leads to results that challenge conventional thinking about timing equilibria. Notably, under quantity competition, rather than the familiar cut-throat race to be a leader, the timing equilibrium prescribes a natural leader–follower sequencing, with each party in a “win–win” situation relative to simultaneous early play.

Keywords: Competition; Input pricing; Time-to-market; Vertically integrated producer (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11149-018-9368-8 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:54:y:2018:i:2:d:10.1007_s11149-018-9368-8

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11149/PS2

Access Statistics for this article

Journal of Regulatory Economics is currently edited by Michael A. Crew

More articles in Journal of Regulatory Economics from Springer
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2019-04-07
Handle: RePEc:kap:regeco:v:54:y:2018:i:2:d:10.1007_s11149-018-9368-8