On the Irrelevance of Input Prices for Make-or-Buy Decisions

S-Tier
Journal: American Economic Review
Year: 2005
Volume: 95
Issue: 5
Pages: 1631-1638

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

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

Abstract

This paper demonstrates that input prices need not reflect the costs of an efficient incumbent supplier in order to induce entrants to implement efficient make-or-buy decisions. Because of strategic downstream considerations, entrants may always undertake efficient make-or-buy decisions, regardless of the prices at which they are authorized to buy key inputs from incumbent suppliers.

Technical Details

RePEc Handle
repec:aea:aecrev:v:95:y:2005:i:5:p:1631-1638
Journal Field
General
Author Count
1
Added to Database
2026-01-29