演講者簡介 : Professor Chiang received her Ph.D. in Economics from University of Texas at Austin in 2013. She is currently an Assistant Professor at National Chengchi University. Her research fields are Microeconomic Theory, and Industrial Organization.
演講摘要 : This paper studies the spillover effect of exits in a vertical relationship under uncertainty using the real options approach. In addition to timing decisions in the standard real options models, the firms’ strategy space also include firms’ price and quantity decisions. When the exogenous demand becomes low, one party of the supply chain wants to exit first and will thus lead to the exit of the remaining party. I find that when the downstream firm wants to exit earlier then the upstream firm, the upstream firm strategically lowers the price of the intermediate good to delay the exit of its downstream firm and thus prevent its own exit. In this case, the expected delay in exit is derived. However, due to the “asymmetry” in vertical relationships, the downstream firm is “helpless” when facing the exit of the upstream firm. In both cases, when the demand level drops below the unique equilibrium exit threshold, both firms will exit simultaneously.
