Welfare effects of outsourcing in duopolistic markets
König, Jan ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleWelfare effects of outsourcing in duopolistic markets
AuthorKönig, Jan
InstitutionUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages28 S.
Series Discussion paper / School of Business & Economics ; 2010/34 : Economics
Keywordsstrategic outsourcing; oligopoly; welfare effects
Classification (DDC)338 Production
AbstractThis paper shows the strategic aspects of international outsourcing in a
duopolistic market. Due to different costs of integrated production and
outsourcing, the choice of a firm influences the strategy of the competitor
via the output price. Therefore, the resulting market constellation depends
on the fixed costs and the difference between marginal costs. We show that
the three market constellations, both firms produce integrated, both use
outsourcing and the firms operate with different strategies are possible. Also
the welfare effects of the different outcomes are analysed. If the optimal
firms decision is characterized by different strategies, this constellations for
given costs is pareto superior to a constellation with equal strategies. On the
other hand, for given costs, a resulting constellation of equal strategies can
be pareto inferior or pareto superior to a constellation with different
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FU DepartmentDepartment Business and Economics
Other affiliation(s)Lehrstuhl für Finanzwissenschaft
Year of publication2010
Type of documentBook
Terms of use/Rights Nutzungsbedingungen
Created at2011-01-05 : 02:09:27
Last changed2015-01-22 : 04:40:40
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000009088