%S TSE Working Paper
%A Guillem Roig
%T What Determines Market Structure? An Explanation from Cooperative Investment with Non‐Exclusive Co
%X 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.
%K cooperative investment
%K investment distribution
%K competition
%B TSE Working Paper
%V 14-482
%D 2014
%I TSE Working Paper
%L publications15875