Publications
43 results found
Chemla G, 2000, Downstream Competition, Foreclosure, and Vertical Integration
This paper analyses the impact of competition among downstream firms on an upstream firm's payoff and on its incentive to vertically integrate when firms on both segments negotiate optimal contracts. We argue that tougher competition decreases the downstream industry profit, but improves the upstream firm's negotiation position. In particular, the upstream firm is better off encouraging competition when the downstream firms have high bargaining power. We derive implications on the interplay between vertical integration and competition among the downstream firms. The mere possibility of vertical integration may constitute a barrier to entry and may trigger strategic horizontal spin-offs or mergers. We discuss the impact of upstream competition on our results.
Chemla G, 2000, Reflexions sur le rapport 1999 du Toronto stock exchange sur le gouvernement d'entreprise (with english summary), Gouvernance, Vol: 1, Pages: 100-104
Chemla G, 2000, Financial analysis and corporate strategy., REVIEW OF FINANCIAL STUDIES, Vol: 13, Pages: 249-253, ISSN: 0893-9454
Chemla G, 2000, Financial analysis and corporate strategy (book review), Review of Financial Studies, Vol: 13, Pages: 249-253
Chemla G, 1999, L'Impact de la negociation et des prises de controle sur l'ampleur de l'Effet de Cliquet (with english summary), Annales d'Economie et de Statistiques, Vol: 54, Pages: 157-171
Chemla G, 1999, Downstream Competition, Foreclosure, and Vertical Integration.
This paper analyzes the impact of competition among downstream firms on an upstream firm's payoff and on its incentives to vertically integrate when firms on both segments negotiate optimal contracts. The author argues that tougher competiton decreases the downstream industry profit, but improves the upstream firm's negotiation position.
CHEMLA G, 1999, L'impact de la négociation et des prises de contrôles sur l'ampleur de l'effet de cliquet, Annals of Economics and Statistics, Pages: 157-171
This paper considers a long-term relationship between a firm and a privately informed trading partner, say a buyer, when both parties bargain over a price in each period and when a takeover may take place. When takeovers are ruled out, having high bargaining power increases the firm's likelihood to exploit information previously revealed by the buyer in subsequent contract offers. This decreases the price which the firm can offer to induce the buyer to reveal his type. The possibility of a takeover by a raider with a bargaining power higher than the incumbent manager's increases the cost of information revelation to the buyer. This in turn leads the incumbent manager either to further decrease the price she charges to induce information revelation or to charge a semi-separating price, in which case the takeover is less likely to take place. In contrast, in the durable good monopolist case, information revelation decreases expected future profits and hence the incentive for takeover so that the possibility of takeover favors information revelation. (JEL D42, D82, G32, L14).
Chemla G, Faure-Grimaud A, 1998, Dynamic Adverse Selection and Debt
In many long-term relationships, parties may be reluctant to reveal their private information in order to benefit from their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces another party to reveal private information. Our argument, which is consistent with casual observation, is based on the idea that (renegotiable) debt is a credible commitment to end the long-term relationship if information is not revealed. We show that the strategic advantage of debt increases with good durability and we briefly address the financing decision of a regulated firm.
Chemla G, 1998, Hold-Up, Industrial Relations and Takeover Threats
This paper analyses the impact of takeover threats on long-term industrial relations. It argues that takeover threats dramatically affect the way in which an increase in workers' bargaining power affects (under)investment. Without loss of generality, we focus on the particular example of the economic consequences of union power in wage negotiations. In the absence of takeovers, the higher workers' bargaining power, the higher their wage flexibility and effort and the firm's capacity to invest, but the lower the firm's incentive to invest. Under the threat of a takeover reducing their expected wages, the workers' effort and wage flexibility are restricted and decrease with the workers' initial bargaining power. Various takeover defence mechanisms are compared.
Chemla G, 1998, Dynamic Adverse Selection and Debt
In many long-term relationships, parties may be reluctant to reveal their private information in order to benefit from their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces another party to reveal private information. Our argument, which is consistent with casual observation, is based on the idea that (renegotiable) debt is a credible commitment to end the long-term relationship if information is not revealed. We show that the strategic advantage of debt increases with good durability and we briefly address the financing decision of a regulated firm.
Chemla G, 1997, Theory of the firm and incomplete contracts (with English summary), Revue d'Economie Politique, Vol: 107, Pages: 295-330
Chemla G, Trinh M, 1997, La mise en concurrence des fournisseurs dans une industrie restructuree, L'Armement, Pages: 138-142
Chemla G, 1996, Competition, Investment and Vertical Integration
This paper analyses the impact of competition among downstream firms on a supplier's investment and on her incentive to vertically integrate. We argue that tougher competition decreases the downstream industry profit, but improved the supplier's negotiation position. In particular, the supplier is better off encouraging competition when the downstream firms have a high bargaining power. Whether vertical integration occurs with a concentrated or a competitive downstream market depends on the demand and cost curves, the impact of investment and the bargaining game. The possibility of vertical integration may be a barrier to entry and may trigger strategic horizontal spin-offs or mergers.
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