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The optimal design of two-part tariffs is investigated in a dynamic model where two firms belonging to the same supply chain invest in R&D (research and development) activities to increase the perceived quality of the final product. It is shown that the replication of the vertically integrated monopolists per- formance can be attained using a two-part tariffin which the fee is a linear function of either the up- stream R&D effort or product quality itself. The possibility of relying on R&D figures appearing in the upstream firms balance sheet is desirable as quality enhancement might not be observable or verifiable.
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Englisch (EN)
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Coordinating research and development efforts for quality improvement along a supply chain
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Elektronische Ressource
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GESIS-BIB
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In: European Journal of Operational Research, 2018 no. 270 ; p. 599-605. ISSN 0377-2217
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