publication . Article . Other literature type . 2005

Implications of Nash Bargaining for Horizontal Industry Integration

Richard E. Just; Siddhartha Mitra; Sinaia Netanyahu;
Open Access
  • Published: 01 May 2005 Journal: American Journal of Agricultural Economics, volume 87, pages 467-481 (issn: 0002-9092, eissn: 1467-8276, Copyright policy)
  • Publisher: Wiley
Abstract
This article shows how horizontal industry integration can arise from transferable asymmetry of technologies and endowments. The Nash bargaining solution suggests that greater technological diversity among coordinating parties yields greater gains from horizontal integration. The framework fits the case where a firm with a superior technology franchises the technology by horizontal integration. The results appear to fit hog production where integration has been primarily horizontal and, in part, broiler production where integration has been both vertical and horizontal. Specifically, technology has been shared through uniform genetic traits, fine-tuned feed rati...
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Subjects
free text keywords: Agricultural and Biological Sciences (miscellaneous), Economics and Econometrics, Industrial organization, Economics, Microeconomics, Bargaining problem, Horizontal and vertical, Horizontal integration, Genetic traits, Technological diversity
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