Does vertical integration increase product quality?

نویسندگان

چکیده

Abstract Numerous product quality scandals are caused by low-quality inputs. When input is not perfectly observed downstream firms, upstream firms often have moral hazard problems. If vertical integration does directly eliminate the problems, still improve quality? so, under which conditions? We find that given precision of monitoring technology used when level public very high or low, no incentive to integrate firms; intermediate, incentives and increases quality.

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ژورنال

عنوان ژورنال: Economic Theory Bulletin

سال: 2022

ISSN: ['2196-1085', '2196-1093']

DOI: https://doi.org/10.1007/s40505-022-00240-4