Lease or Sale: When a Durable Goods Monopolist Can Choose Supply Chain’s Openness

Kitamura, Hiroshi; Matsushima, Noriaki; Sato, Misato

Institute of Social and Economic Research Discussion Papers, 2021, 1127, 1-24

Number of Access:441（2025-07-24 04:30 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/79417

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Title
Lease or Sale: When a Durable Goods Monopolist Can Choose Supply Chain’s Openness
Creator
NRID
1000030582415 1000030582415
CreatorName
Kitamura, Hiroshi
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
read0116301 read0116301
Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
NRID
1000070794585 1000070794585
CreatorName
Sato, Misato
Subject
Durable goods
Exclusive dealing
Vertical relation
Antitrust policy
Abstract
We construct a two-period model of the supply chain’s openness in a durable goods market by introducing two marketing modes: leasing and selling. Given a marketing mode, at the beginning of the first period, an incumbent supplier and the downstream monopolist choose one of the trading modes: (i) a two-period exclusive supply chain or (ii) an open supply chain, allowing the downstream monopolist to trade with an efficient supplier in the second period. We show that the downstream monopolist always chooses the open supply chain in the leasing mode, although the exclusive supply chain is attainable in the selling mode if the incumbent supplier’s efficiency is high. Moreover, when we allow the downstream monopolist to choose the marketing mode endogenously before the first period, it chooses the selling mode if the incumbent supplier’s efficiency is low; otherwise, it chooses the leasing mode. Regardless of the chosen marketing mode, the open supply chain always occurs on the equilibrium path, implying that the recent advancement of ICT to enhance leasing may discourage choosing the exclusive supply chain.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
1127
Page
1-24
Date of Issued
2021-03
Language
English
Handle URL
https://hdl.handle.net/11094/79417
PISSN
0473453X
eISSN
24350982
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2021/DP1127.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers