Allain, Marie-Laure, Chambolle, Claire
, Rey, Patrick
and Teyssier, Sabrina
(2020)
Vertical integration as a source of hold-up: an experiment.
TSE Working Paper, n. 20-1062, Toulouse
![Warning](/style/images/warning.png)
Preview |
Text
Download (531kB) | Preview |
Abstract
In a vertical chain in which two rivals invest before contracting with one of two
competing suppliers, partial vertical integration may create hold-up problems for the
rival. We develop an experiment to test this theoretical prediction in two setups, in
which suppliers can either pre-commit ex ante to appropriating part of the joint profit,
or degrade ex post the support they provide to their customer. Our experimental results confirm that vertical integration creates hold-up problems in both setups. However, we observe more departures from theory in the second one. Bounded rationality and social preferences provide a rationale for these departures.
Item Type: | Monograph (Working Paper) |
---|---|
Language: | English |
Date: | January 2020 |
Place of Publication: | Toulouse |
Uncontrolled Keywords: | Vertical Integration, Hold-up, Experimental Economics, Bounded Rationality, Social Preferences. |
JEL Classification: | C91 - Laboratory, Individual Behavior D90 - General L13 - Oligopoly and Other Imperfect Markets L41 - Monopolization; Horizontal Anticompetitive Practices |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Institution: | Université Toulouse 1 Capitole |
Site: | UT1 |
Date Deposited: | 13 Jan 2020 13:58 |
Last Modified: | 01 Sep 2021 09:45 |
OAI Identifier: | oai:tse-fr.eu:123940 |
URI: | https://publications.ut-capitole.fr/id/eprint/33828 |
Available Versions of this Item
- Vertical integration as a source of hold-up: an experiment. (deposited 13 Jan 2020 13:58) [Currently Displayed]