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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
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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 |
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