Browsing All posts tagged under »Vertical Integration of Successive Monopolists: A Classroom Experiment«

Top PI Blog Posts Countdown No. 2: Double Marginalization and the Decentralized Supply Chain

November 2, 2012

0

Editor’s Note: As we approach my 1,000th Procurement Insights blog post (we are now at 999 posts), I have over the past week, been sharing with you the top 5 posts in terms of overall reads. Today’s submission, which ranked number 2 with 13,077 reads, was written on August 9th, 2007.  The focus of the […]

Double Marginalization and the Decentralized Supply Chain by Jon Hansen

August 9, 2007

1

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 […]