Competition and Contracting in Service Industries

Operations Research Letters, Vol. 39, pp. 390-396, 2011

Columbia Business School Research Paper

7 Pages Posted: 9 Nov 2011

See all articles by Dominic DiPalantino

Dominic DiPalantino

affiliation not provided to SSRN

Ramesh Johari

Stanford University

Gabriel Y. Weintraub

Stanford Graduate School of Business, Stanford University; Columbia University - Columbia Business School - Decision Risk and Operations

Multiple version iconThere are 2 versions of this paper

Date Written: May 17, 2011

Abstract

In service industries with congestion effects, two very different contractual structures are commonly observed, depending on whether or not firms choose to offer a guaranteed service level. We analyze the impact of these choices on market outcomes in oligopolistic industries. Our results highlight how different contractual agreements change the intensity of price competition in service industries. Broadly speaking, we show that competition is intensified when firms choose to offer service level guarantees.

Suggested Citation

DiPalantino, Dominic and Johari, Ramesh and Weintraub, Gabriel Y., Competition and Contracting in Service Industries (May 17, 2011). Operations Research Letters, Vol. 39, pp. 390-396, 2011; Columbia Business School Research Paper. Available at SSRN: https://ssrn.com/abstract=1957366

Dominic DiPalantino

affiliation not provided to SSRN ( email )

Ramesh Johari

Stanford University ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

Gabriel Y. Weintraub (Contact Author)

Stanford Graduate School of Business, Stanford University ( email )

Stanford, CA 94305
United States

Columbia University - Columbia Business School - Decision Risk and Operations ( email )

New York, NY
United States

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