Roig, Guillem (2014) What Determines Market Structure? An Explanation from Cooperative Investment with Non‐Exclusive Co. TSE Working Paper, n. 14-482

[thumbnail of wp_tse_482.pdf]
Preview
Text
Download (852kB) | Preview

Abstract

In a common agency setting, where the common buyer undertakes cooperative investment with her suppliers, we obtain a direct link between the level of ex-post competition and investment which affects the market structure of the supply side of the market. We show that more competitive equilibria are associated with a larger and more homogeneous distribution of investment among active suppliers, and an equilibrium with no investment might occur when competition is mild. In our model, buyer's investment works as a mechanism to incentivize competition, and its effectiveness is positively related to the level of competition ex-post. In general, the equilibrium investment profile is lower than efficiency, and we surprisingly find that higher competitive markets may sustain a larger number of suppliers.

Item Type: Monograph (Working Paper)
Language: English
Date: 26 March 2014
Uncontrolled Keywords: cooperative investment, investment distribution, competition
JEL Classification: C72 - Noncooperative Games
D43 - Oligopoly and Other Forms of Market Imperfection
D44 - Auctions
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:43
Last Modified: 07 Mar 2018 13:22
OAI Identifier: oai:tse-fr.eu:28043
URI: https://publications.ut-capitole.fr/id/eprint/15875
View Item

Downloads

Downloads per month over past year