Industrial strategies within a value chain

After a review of value chain features which induce strategic couplings related to inefficiencies, this paper addresses the case of an infinitely repeated interaction within a value chain. This enables to identify a feature which hasn't been reported in the literature, namely tacit collusion with tiers. This model enables to extend Nocke and White's results (2007) of tacit collusion facilitation, through vertical integration, with the identification of 2 new effects, among which the key player effect, which is the ability to choose the tiers which will collude. The equilibrium number of sequential vertical integration has been derived, with its implications for welfare distribution among value chains. One surprising result emerges from tacit collusion with tiers which is a relationship between the number or the share of vertically integrated firms in an industry and the interest rate.

Author: Rocle-R

Publisher: Omniscriptum

Publication Date: Feb 28, 2018

Number of Pages: 84 pages

Binding: Paperback or Softback

ISBN-10: 6131552568

ISBN-13: 9786131552564