First Mover or Second Mover? Endogenous Timing With Partial Vertical Ownership
Abstract
ABSTRACT We investigate a vertically related market with an upstream firm offering inputs to two downstream firms. Considering that downstream firms hold partial vertical ownership of the upstream firm without control rights, we analyze the endogenous order of moves for downstream firms and find that they may choose a more competitive situation: simultaneous pricing under Bertrand competition or sequential production under Cournot competition. Our results reverse the well‐known endogenous order of moves and occur when the degree of product substitutability is low or the degree of partial vertical ownership is high.
Fields of Study & Subjects
Merger and Competition Analysis
Supply Chain and Inventory Management
Game Theory and Applications
Publication details
- Journal / source
- Bulletin of Economic Research
- Volume
- 78
- Issue
- 4
- Pages
- 758–767
- Publication date
- 10 March 2026
- Language
- EN