This paper examines whether market-share delegation and the order of moves affect input
pricing. It shows that: (i) input pricing is irrelevant of delegation form and the order of move
between upstream and downstream firms under quantity competition; (ii) downstream firms
obtain the same profit as in the simple Nash equilibrium regardless of delegation forms in a
delegation–input price–quantity competition game; and (iii) the upstream monopolist will
commit input price regardless of the form of delegation. Input pricing strategy of the
upstream monopolist will lessen the problem of vertical externality.
International Journal of the Economics of Business