Private incentives to vertical disintegration among firms with heterogeneous objectives

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Rossini, Gianpaolo (2003)
  • Publisher: Bologna: Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
  • Journal: (eissn: 2282-6483)
  • Related identifiers: doi: 10.6092/unibo/amsacta/4818, doi: 10.6092/unibo/amsacta/623
  • Subject: Vertical Integration Labor Managed Firms | Quaderni - Working Paper DSE | SECS-P/02 Politica economica
    • ddc: ddc:330

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.
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