Vertical integration and sabotage among enterprises

被引：0
作者：
Yan W. [1 ]
Teng L. [1 ]
Luo Y. [2 ]
机构：
[1] School of Economics and Business Administration, Chongqing University, Chongqing
[2] Retail Banking and Wealth Management, HSBC Chongqing Branch, Chongqing
来源：
| 1600年 / Systems Engineering Society of China卷 / 37期
关键词：
Broadband access market; Sabotage; Simulation; Vertical integration;
D O I：
10.12011/1000-6788(2017)01-0159-13
中图分类号：
学科分类号：
摘要：
Vertical integration not only generates vertical economy but also engages the vertically integrated provider (referred as VIP hereafter) into sabotaging the independent enterprise in the downstream market. For example, the VIP may lower the quality of the intermediate product, delay the shipment, and hide key information. The recent cases such as the discrimination in broadband market and LCD panel monopoly are typical evidence of the VIP's sabotage behavior. Using mathematical modeling and simulation which is based on data from China Uni-com broadband market, we analyze the factors that lead to sabotage and the mechanism behind. The results show: First, VIP's sabotage is increasing with the final product's price, yet decreasing with the intermediate product's price. Second, VIP's sabotage is decreasing with the independent enterprise's market share. Third, VIP's sabotage is decreasing with the subsidiary's other elements cost and increasing with independent enterprises' other element cost. Fourth, only within a certain range, sabotage is negatively related to the price elasticity of independent enterprise and positively related to the cross price elasticity between subsidiary and independent enterprises. Beyond this certain range, it's difficult to judge the relation between sabotage and elasticity. These findings provide theoretical guidance for policy making in deterring sabotage and regulation. © 2017, Editorial Board of Journal of Systems Engineering Society of China. All right reserved.
引用
收藏
页码：159 / 171
页数：12
相关论文
共 32 条
  • [1] Nadimi S.R., Weisman D.L., Nonexclusionary input price, Applied Economics Letters, 21, 11, pp. 727-732, (2014)
  • [2] Beard T.R., Kaserman D.L., Mayo J.W., Regulation, vertical integration and sabotage, The Journal of Industrial Economics, 49, 3, pp. 319-333, (2001)
  • [3] Bijlsma M., Bijl P., Kocsis V., Incentives for sabotage in electronic communications markets, (2008)
  • [4] Mandy D.M., Sappington D.E.M., Incentives for sabotage in vertically related industries, Journal of Regulatory Economics, 31, 3, pp. 235-260, (2007)
  • [5] Bustos A.E., Galetovic A., Vertical integration and sabotage with a regulated bottleneck monopoly, The B.E. Journal of Economic Analysis & Policy, 9, 1, pp. 1-52, (2009)
  • [6] Kondaurova I., Weisman D.L., Incentives for non-price discrimination, Information Economics and Policy, 15, 2, pp. 147-171, (2003)
  • [7] Reiffen D.A., Regulated firm's incentive to discriminate: A reevaluation and extension of Weisman's result, Journal of Regulatory Economics, 14, 1, pp. 79-86, (1998)
  • [8] Weisman D.L., Regulation and the vertically integrated firm: The case of RBOC entry into interLATA long distance, Journal of Regulatory Economics, 8, 3, pp. 249-266, (1995)
  • [9] Weisman D.L., The incentive to discriminate by a vertically-integrated regulated firm: A reply, Journal of Regulatory Economics, 14, 1, pp. 87-91, (1998)
  • [10] Bergman M.A., A note on N. economides: The incentive for non-price discrimination by an input monopolist, International Journal of Industrial Organization, 18, 6, pp. 985-988, (2000)
1234