Networks versus vertical integration.

dc.contributor.author	Kranton, Rachel	en_US
dc.contributor.author	Minehart, Deborah F.	en_US
dc.date.accessioned	2010-06-28T19:05:14Z
dc.date.available	2010-06-28T19:05:14Z
dc.date.issued	2000	en_US
dc.identifier.citation	Kranton, Rachel and Deborah F. Minehart. Networks versus vertical integration. RAND Journal of Economics. 31.3 (2000): 570-601. Print.
dc.identifier.uri	http://hdl.handle.net/10161/2628
dc.identifier.uri	http://www.jstor.org/stable/2601001
dc.description.abstract	We construct a theory to compare vertically integrated firms to networks of manufacturers and suppliers. Vertically integrated firms make their own specialized inputs. In networks, manufacturers procure specialized inputs from suppliers that, in turn, sell to several manufacturers. The analysis shows that networks can yield greater social welfare when manufacturers experience large idiosyncratic demand shocks. Individual firms may also have the incentive to form networks, despite the lack of long-term contracts. The analysis is supported by existing evidence and provides predictions as to the shape of different industries. ABSTRACT FROM AUTHOR	en_US
dc.format.extent	11199536 bytes
dc.format.mimetype	application/pdf
dc.language.iso	en_US
dc.publisher	RAND Corporation
dc.title	Networks versus vertical integration.	en_US
dc.type	Journal Article	en_US
dc.department	Economics
dc.relation.journal	RAND Journal of Economics