Economizing in a Context of Strategizing: Governance Mode Choice in Cournot Competition
Posted: 18 Nov 1999
This paper builds on Riordan and Williamson (1985) by exploring the economizing choice of organizational form by firms competing in a homogeneous-good market. The paper investigates rivalrous firms' investment and organization choice in a Cournot competition. The model suggests that both governance cost and strategic interactions can influence which asset-organization pair each firm chooses. Application of the model is illustrated with a discussion of the cola wars and the organization of the fountain channel.
JEL Classification: D21, D23, L22
Suggested Citation: Suggested Citation