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