EconPapers    
Economics at your fingertips  
 

Outsourcing Under Incomplete Information

Tarun Kabiraj and Uday Sinha ()

Working Papers from eSocialSciences

Abstract: The Author considers outsourcing decision of a firm in a Cournot duopoly with incomplete information. There is incomplete information about the production technology of one firm. It is shown that outsourcing can occur as outcomes of a separating or pooling perfect Bayesian equilibrium, although it is not profitable under complete information. Thus, the paper shows that asymmetric information can itself be a reason for outsourcing. It further shows that under outsourcing equilibrium consumers gain, producers as a whole loose, but the overall welfare falls.

Keywords: Outsourcing; incomplete information; Bayesian Cournot; signalling and pooling equilibrium; welfare analysis; outsourcing decision; firm; information; production; technology. (search for similar items in EconPapers)
Date: 2017-11
Note: Institutional Papers
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.esocialsciences.org/Download/repecDownl ... AId=12217&fref=repec

Related works:
Journal Article: Outsourcing under incomplete information (2017) Downloads
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:ess:wpaper:id:12217

Access Statistics for this paper

More papers in Working Papers from eSocialSciences
Bibliographic data for series maintained by Padma Prakash ().

 
Page updated 2019-04-12
Handle: RePEc:ess:wpaper:id:12217