Private incentives to vertical disintegration among firms with heterogeneous objectives
Research, Preprint, Book
- Publisher: Bologna: Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
Vertical Integration Labor Managed Firms | Quaderni - Working Paper DSE | SECS-P/02 Politica economica
A vertically integrated monopoly is compared to a decentralized market arrangement where production is segmented. A Labor Managed firm produces an input used by a profit maximizer manufacturer of a final good. Unlike what usually occurs between homogeneous firms we find circumstances in which the decentralised vertical arrangement is privately superior to the integrated one.