In the literature on vertical relations little attention has been paid to the role of strategic uncertainty, that is, the presence of multiple self-enforcing outcomes which might lead to coordination failure. However, if firms have some degree of freedom in designing the industrial relations they engage, alternative solutions, in the form of vertical contracts, are possible. A game-theoretic model is provided to show how some of the most popular forms of vertical contractual relations can be derived as equilibria of a multi-stage game in which firms bargain over their reciprocal vertical control, in order to minimize the inefficiency created by strategic uncertainty.
Friends do Matter: Strategic Uncertainty and Vertical Integration
PONTI, Giovanni;
1997
Abstract
In the literature on vertical relations little attention has been paid to the role of strategic uncertainty, that is, the presence of multiple self-enforcing outcomes which might lead to coordination failure. However, if firms have some degree of freedom in designing the industrial relations they engage, alternative solutions, in the form of vertical contracts, are possible. A game-theoretic model is provided to show how some of the most popular forms of vertical contractual relations can be derived as equilibria of a multi-stage game in which firms bargain over their reciprocal vertical control, in order to minimize the inefficiency created by strategic uncertainty.I documenti in SFERA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
