Department of Economics and Business Economics

Concurrent sourcing as a mechanism for safeguarding specific investments from opportunism

Research output: Contribution to conferencePaperResearchpeer-review

This paper identifies when concurrent sourcing is an effective safeguard. Concurrent sourcing shortens the period that a buyer needs in order to internalize production and thus, it shortens the period in which an external supplier is able to hold-up a buyer. Concurrent sourcing also allows for short run expansion of production and reduces costs of lost customers. However, when complementarities and diseconomies of scale make concurrent sourcing an efficient choice for a buyer, the same complementarities and diseconomies of scale also weaken the threat that the internal production unit may replace the external supplier.
Original languageEnglish
Publication year2016
Number of pages10
Publication statusPublished - 2016
Event23rd EurOMA conference - Trondheim, Norway
Duration: 17 Jun 201622 Jun 2016


Conference23rd EurOMA conference

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ID: 100805010