Strategic spin-offs of input divisions
- 作者：Ping Lin
- 关键词：Spin-offs ; Commitment effect ; Successive Cournot oligopoly ; Multilateral negotiations
- 刊名：European Economic Review
- 出版年：2006
- 期刊代码：13_00142921
- 类别：eco
- 出版时间：May 2006
- 卷：50
- 期：4
- 页码：977-993
- 文件大小：220 K
摘要
When a downstream producer enters backward into the input market, a “helping the rivals effect” exists: Such entry hurts the firm's downstream business as it increases upstream competition and thus benefits its rival downstream firms. This negative externality prevents the newly-created upstream unit from expanding. A spin-off enables the firm to credibly expand in the input market, thereby forcing its upstream competitors to behave less aggressively. Spin-offs occur in equilibrium if and only if the number of downstream firms exceeds a threshold level. When there is more than one integrated firm, a spin-off by a firm can trigger spin-offs by others that would not occur otherwise.