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Article Economics Letters June 2013 Vacancies in Supply Chain Networks |
We use the supply chain matching framework to study the effects of firm exit. We show that the exit of an initial supplier or end consumer has monotonic effects on the welfare of initial suppliers and end consumers but may simultaneously have positive and negative effects on intermediaries. Furthermore, we demonstrate that there are no clear comparative statics for the effects of intermediary exit on the welfare of other firms; most surprisingly, intermediary exit may diminish the welfare of other firms at the same level of the supply chain.
Keywords: matching; networks; stability; Vacancy chains; Market Entry and Exit; Supply Chain;
Hatfield, John William, and Scott Duke Kominers. "Vacancies in Supply Chain Networks." Economics Letters 119, no. 3 (June 2013): 354–357.
