Market structure and strategic bi-sourcing

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• 作者：Hamid Beladi^a ; ^{hamid.beladi@utsa.edu} ; Arijit Mukherjee^b ; ^c
• 关键词：D21 ; D23 ; D43 ; L13 ; L23
• 刊名：Journal of Economic Behavior and Organization
• 出版年：2012
• 期刊代码：36_01672681
• 类别：eco
• 出版时间：April, 2012
• 卷：82
• 期：1
• 页码：210-219
• 文件大小：392 K

摘要

We provide a new rationale for bi-sourcing, which refers to the situation where a final goods producer buys an input from an outside supplier and also produces it in-house. We also show the effects of the product market competition and the implications of different and common outside input suppliers on the profits of the final goods producers. In-house input production reduces the price charged by the outside input supplier, and may make bi-sourcing as a profitable strategy. Under bi-sourcing, the final goods producers may be better off by outsourcing to a common input supplier than by outsourcing to different input suppliers. In the presence of bi-sourcing, the final goods producers may not have the incentive for cooperation in the product market. Our results show that even if the final goods producer's marginal cost of in-house input production is higher than the outside supplier's marginal cost of input production, bi-sourcing makes the consumers better off compared to complete outsourcing.