Entry and Vertical Disintegration
Alain de Fontenay () and
Christiaan Hogendorn ()
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Alain de Fontenay: CITI, Columbia University
No 2005-010, Wesleyan Economics Working Papers from Wesleyan University, Department of Economics
Abstract:
We formalize and extend George Stigler’s famous article “The division of labor is limited by the extent of the market.” We emphasize economies of scale in intermediate goods production as a determinant of firm boundaries and vertical control. We show that there are potential coordination failures which may prevent efficient vertical disintegration, and we discuss how these might be either overcome or used to the advantage of incumbent firms.
Keywords: entry; vertical integration; specialization (search for similar items in EconPapers)
JEL-codes: D23 L22 L23 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2005-12
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:wes:weswpa:2005-010
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