Intermediate good sourcing, wages and inequality: From theory to evidence

2019 ◽  
Vol 27 (5) ◽  
pp. 1295-1350
Author(s):  
Philip Luck
Keyword(s):  
Intermediate Good

The Choice of Prices versus Quantities under Outsourcing

2018 ◽  
Vol 18 (2) ◽  
Author(s):  
Ray-Yun Chang ◽  
Jin-Li Hu ◽  
Yan-Shu Lin
Keyword(s):  
Product Differentiation ◽  
Cost Efficiency ◽  
Intermediate Good ◽  
Price Strategy ◽  
Competition Strategy ◽  
Duopoly Model ◽  
The Cost ◽  
Prices Versus Quantities

Abstract This paper establishes a duopoly model with product differentiation and outsourcing in order to analyze the equilibrium competition strategies (choice of prices versus quantities) when the outsourcer outsources its intermediate good to a final product competitor. We show that: (1) both firms choose the quantity strategy when the cost efficiency of the subcontractor is low; (2) the choice of competition strategy is the price strategy for the subcontractor and the quantity strategy for the outsourcer when the cost efficiency of the subcontractor is moderate; (3) both firms choose the price strategy when the cost efficiency of the subcontractor is sufficiently high.

Price dumping in intermediate good markets

1995 ◽  
Vol 39 (1-2) ◽  
pp. 159-173 ◽  
Author(s):  
Daniel M. Bernhofen
Keyword(s):  
Intermediate Good

DOES TRADE IN INTERMEDIATE GOODS INCREASE OR DECREASE WAGE INEQUALITY?

2007 ◽  
Vol 52 (02) ◽  
pp. 201-213 ◽  
Author(s):  
WENLI CHENG ◽  
DINGSHENG ZHANG
Keyword(s):  
Developing Country ◽  
Wage Inequality ◽  
Intermediate Good ◽  
Intermediate Goods ◽  
Unskilled Labor ◽  
Developed Country ◽  
Good Will ◽  
Skilled And Unskilled Labor ◽  
Production Technologies ◽  
The Impact

This paper develops two models to study the impact of trade in intermediate goods on wage inequality between skilled and unskilled labor in a developed country and a developing country. The first model assumes symmetric production technologies in the intermediate good. It predicts that trade in the intermediate good will increase wage inequality in the developed country, but decrease wage inequality in the developing country. The second model assumes asymmetric technologies in the intermediate good. It predicts that trade in the intermediate good can lead to an increase in wage inequality in both the developed country and the developing country.

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