Abstract Firms along with producing components in-house source some requirements from a supplier competing in the downstream market (encroachment). However, the supplier may strategically choose not to compete with the manufacturer (no-encroachment). In a stylized game-theoretic model, we characterize component quality decisions of the supplier, a two-part tariff contracting structure, and the market output decisions of both players. We focus on investigating the effect of product quality differentiation and partial outsourcing strategy on the above decisions. We find that product quality may increase or decrease with the increase in product differentiation. Further, we find that the increase in the fraction of requirements outsourced by the manufacturer to the supplier may increase or decrease the product quality. Later, our analysis reveals that when a manufacturer’s in-house quality cost is very low, or the degree of product differentiation is in the moderate range, the supplier encroachment could lead to a “win-win” outcome for both players

中文翻译：

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竞争对手的部分外包：产品差异化和信息不对称下的质量决策

摘要 内部生产组件的公司从在下游市场竞争的供应商那里获得一些要求（侵占）。但是，供应商可能会战略性地选择不与制造商竞争（无侵占）。在一个程式化的博弈论模型中，我们描述了供应商的组件质量决策、两部分关税合同结构以及两个参与者的市场产出决策。我们重点研究了产品质量差异化和部分外包策略对上述决策的影响。我们发现产品质量可能随着产品差异化程度的增加而提高或降低。此外，我们发现制造商外包给供应商的需求比例的增加可能会增加或降低产品质量。之后，