Journal article
Complementary Inputs, Mutual Outsourcing, and Supplier Encroachment
The Journal of industrial economics, v 73(3), pp 458-479
Sep 2025
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Final goods are typically produced using multiple complementary inputs. We examine the incentives and implications of supplier encroachment incorporating this fact and allowing for the possibility of mutual outsourcing between the encroached supplier and the incumbent. We show that mutual outsourcing can occur when both firms are present in the final good market. We also show that, unlike the single input case, the supplier refrains from encroaching when mutual outsourcing results in high wholesale prices and that encroachment can benefit the incumbent by generating input sales. Finally, we show that nonlinear contracts play a significant role for encroachment.
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Details
- Title
- Complementary Inputs, Mutual Outsourcing, and Supplier Encroachment
- Creators
- Chrysovalantou Milliou - Athens University of Economics and BusinessKonstantinos Serfes (Corresponding Author) - Drexel University
- Publication Details
- The Journal of industrial economics, v 73(3), pp 458-479
- Publisher
- Wiley
- Number of pages
- 22
- Grant note
- Stavros Niarchos FoundationGreek Diaspora Fellowship from the Stavros Niarchos Foundation
We thank the Editor, Matthew Mitchell, and two anonymous referees for their valuable comments and suggestions. We also extend our gratitude to Marco Buso, Michael Kopel, Stefan Lobin, Noriaki Matsushima, Emmanuel Petrakis, Patrick Rey, Nikolas Tsakas, and Yaron Yehezkel, as well as to the conference participants at the IIOC 2020 online, the Oligo Workshop 2023 in Padova, the CRETE 2023 in Naxos, the EARIE 2023 in Rome, the 2024 MaCCI in Mannheim, and the Jornadas de Economia Industrial 2024 in Seville for their helpful feedback. We are grateful to the Greek Diaspora Fellowship from the Stavros Niarchos Foundation for financial support. All remaining errors are our own.
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:001494364300001
- Scopus ID
- 2-s2.0-105006482053
- Other Identifier
- 991022054214204721
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance
- Economics