Browsing All posts tagged under »decentralized procurement«

Double Marginalization and the Decentralized Supply Chain by Jon Hansen

August 9, 2007

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Double marginalization is defined as the “exercise of market power at successive vertical layers in a supply chain.”  Dating back to Lerner (1934) the problem that arises as a result of double marginalization is tied to an impetus to mark up the product’s price above marginal cost.  According to a 2005 Caltech paper (Vertical Integration […]