Munich Personal RePEc Archive

Profit-reducing fixed-price contract: The role of the transport sector

Takauchi, Kazuhiro (2016): Profit-reducing fixed-price contract: The role of the transport sector.

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Abstract

We show that under a fixed-price contract where an upstream firm first sets the input price and downstream firms subsequently invest in R&D, all firms can become worse off when considering two-way trade with firm-specific carriers.

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