de Fontenay, Alain, and Christiaan Hogendorn. 2006. "Entry and Vertical Disintegration." Presented at "Building the European Commons: From Open Fields to Open Source," European Regional Meeting of the International Association for the Study of Common Property (IASCP) , Brescia, Italy, March 23-25.

Abstract

"We formalize and extend George Stigler's famous article 'The division of labor is limited by the extent of the market.' We emphasize economies of scale in intermediate goods production as a determinant of firm boundaries and vertical control. We show that there are potential coordination failures which may prevent efficient vertical disintegration, and we discuss how these might be either overcome or used to the advantage of incumbent firms."