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Allain, Marie-Laure
, Rey, Patrick and Teyssier, Sabrina
(2021)
Vertical integration as a source of hold-up: an experiment.
European Economic Review, vol. 137 (n° 103783).
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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: | Article |
|---|---|
| Language: | English |
| Date: | August 2021 |
| Refereed: | Yes |
| Uncontrolled Keywords: | Vertical Integration, Hold-up, Experimental Economics, Bounded Rationality, Social Preferences. |
| JEL Classification: | C91 - Laboratory, Individual Behavior D90 - General J41 - Contracts - Specific Human Capital, Matching Models, Efficiency Wage Models, and Internal Labor Markets |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Site: | UT1 |
| Date Deposited: | 16 Sep 2021 15:25 |
| Last Modified: | 18 Jul 2023 10:13 |
| OAI Identifier: | oai:tse-fr.eu:125852 |
| URI: | https://publications.ut-capitole.fr/id/eprint/43763 |
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Vertical integration as a source of hold-up: an experiment. (deposited 13 Jan 2020 13:58)
- Vertical integration as a source of hold-up: an experiment. (deposited 16 Sep 2021 15:25) [Currently Displayed]
