Welfare‐improving cooperation with a consumer‐friendly multiproduct corporation
We consider a multiproduct corporation that adopts consumer‐friendly activities and cooperates with single‐plant firms for improving welfare. We show that full cooperation is socially beneficial if products are strong complements, whereas partial cooperation with higher consumer‐friendly activities...
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| Published in | Managerial and decision economics Vol. 41; no. 7; pp. 1144 - 1155 |
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| Main Authors | , , |
| Format | Journal Article |
| Language | English |
| Published |
Chichester
Wiley Periodicals Inc
01.10.2020
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| Subjects | |
| Online Access | Get full text |
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| Abstract | We consider a multiproduct corporation that adopts consumer‐friendly activities and cooperates with single‐plant firms for improving welfare. We show that full cooperation is socially beneficial if products are strong complements, whereas partial cooperation with higher consumer‐friendly activities is beneficial if products are substitutes. We also examine a sequential choice game of endogenous cooperation in which the multiproduct corporation can induce (partial or full) cooperation and show that our findings are still consistent at equilibrium. We finally compare different ownership of the single‐plant firms and find that foreign ownership decreases the benefits of cooperation. |
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| AbstractList | We consider a multiproduct corporation that adopts consumer‐friendly activities and cooperates with single‐plant firms for improving welfare. We show that full cooperation is socially beneficial if products are strong complements, whereas partial cooperation with higher consumer‐friendly activities is beneficial if products are substitutes. We also examine a sequential choice game of endogenous cooperation in which the multiproduct corporation can induce (partial or full) cooperation and show that our findings are still consistent at equilibrium. We finally compare different ownership of the single‐plant firms and find that foreign ownership decreases the benefits of cooperation. |
| Author | Leal, Mariel García, Arturo Lee, Sang‐Ho |
| Author_xml | – sequence: 1 givenname: Arturo surname: García fullname: García, Arturo organization: Universidad de las Américas Puebla – sequence: 2 givenname: Mariel surname: Leal fullname: Leal, Mariel organization: Tecnologico de Monterrey – sequence: 3 givenname: Sang‐Ho orcidid: 0000-0002-0283-5998 surname: Lee fullname: Lee, Sang‐Ho email: sangho@jnu.ac.kr organization: Chonnam National University |
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| Cites_doi | 10.1111/roie.12362 10.1086/697902 10.1257/mic.5.4.188 10.1111/manc.12200 10.1007/s10551-011-0867-0 10.1007/s00712-018-00651-7 10.1111/1467-8454.12164 10.1016/j.econmod.2018.11.020 10.1111/joes.12055 10.1007/s12232-017-0276-5 10.1111/j.1430-9134.2001.00007.x 10.1257/jel.50.1.51 10.1016/j.econmod.2015.05.016 10.1002/mde.3073 10.1007/978-3-030-30549-9_17 10.1002/mde.3031 10.1017/S0022109018000716 10.2307/2600994 10.1111/j.1530-9134.2008.00177.x 10.1016/j.frl.2017.12.005 10.1086/658161 10.1007/s10842-009-0063-4 10.2202/1935-1704.1563 10.1111/j.1467-937X.2009.00573.x 10.1007/s00712-019-00663-x 10.1111/j.1468-0335.2009.00843.x 10.1016/j.jfineco.2013.04.014 10.1111/jere.12221 10.1007/s11077-009-9084-4 10.1007/s00712-016-0498-0 10.1257/aer.103.2.1006 10.1016/j.iref.2019.03.001 10.2307/1885620 |
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| SubjectTerms | Alliances Cooperation Endogenous Ownership Welfare |
| Title | Welfare‐improving cooperation with a consumer‐friendly multiproduct corporation |
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