The Choice of Prices versus Quantities under Outsourcing

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Title:	The Choice of Prices versus Quantities under Outsourcing
Authors:	Chang, RY (Chang, Ray-Yun) Hu, JL (Hu, Jin-Li) Lin, YS (Lin, Yan-Shu)
Contributors:	經濟學系暨經濟學系碩博士班
Keywords:	MIXED DUOPOLY DIFFERENTIATED DUOPOLY VS. QUANTITY COMPETITION BERTRAND COURNOT WELFARE PROFITABILITY UNCERTAINTY STRATEGIES
Date:	2018-07
Issue Date:	2019-01-17 13:33:52 (UTC+8)
Abstract:	This paper establishes a duopoly model with product differentiation and outsourcing in order to analyze the equilibrium competition strategies (choice of prices versus quantities) when the outsourcer outsources its intermediate good to a final product competitor. We show that: (1) both firms choose the quantity strategy when the cost efficiency of the subcontractor is low; (2) the choice of competition strategy is the price strategy for the subcontractor and the quantity strategy for the outsourcer when the cost efficiency of the subcontractor is moderate; (3) both firms choose the price strategy when the cost efficiency of the subcontractor is sufficiently high.
Appears in Collections:	[Department of Economics & Graduate Institute of Economics ] journal articles

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