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Concurrence sur le marché des produits et théorie de la firme .
Author(s) -
De Bettignies JeanEtienne
Publication year - 2006
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2006.00377.x
Subject(s) - duopoly , business , competition (biology) , industrial organization , delegation , asset (computer security) , incentive , product (mathematics) , product market , quality (philosophy) , property rights , microeconomics , commerce , economics , cournot competition , ecology , geometry , mathematics , biology , philosophy , computer security , management , epistemology , computer science
This paper studies the effects of product market competition on firm boundaries. In a duopoly setting, each retailer is associated with a manufacturer who must decide how to allocate property rights over a retail asset. Delegating property rights over the retail asset to an indepedent retailer (‘disintegration’) transfers incentives from the manufacturer to the retailer and has the benefit of increasing product quality and profits, owing to the retailer's superior efficiency. However, it also forces the manufacturer to forfeit part of the profits. Competition increases the net benefit from delegation and leads to more efficient, vertically disintegrated structures.