Distorted Input Ratios in Vertical Relationships

B-Tier
Journal: Scandanavian Journal of Economics
Year: 2020
Volume: 122
Issue: 4
Pages: 1480-1509

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

A project leader sources an input from a supporter and combines it with an input produced in‐house. The leader has private information about the project's cost environment. We show that if the leader can commit to the in‐house input level, the input ratio is distorted upward when the in‐house input is not too costly – the in‐house input is produced in excess and thus partly wasted. By contrast, without the leader's commitment to the in‐house input level, the input ratio is distorted downward when the in‐house input is sufficiently costly – the outsourced input is produced in excess and thus partly wasted.

Technical Details

RePEc Handle
repec:bla:scandj:v:122:y:2020:i:4:p:1480-1509
Journal Field
General
Author Count
2
Added to Database
2026-01-28