Diversification, Diseconomies of Scope, and Vertical Contracting: Evidence from the Taxicab Industry

    Management Science, pp. 1534-1550, 2010.

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    Keywords:
    interagent conflicttaxicab industrylimousine fleetlimousine businesstaxicab firms outsourceMore(10+)

    Abstract:

    This paper studies how firms reorganize following diversification, proposing that firms use outsourcing, or vertical disintegration, to manage diseconomies of scope. We also consider the origins of scope diseconomies, showing how different underlying mechanisms generate contrasting predictions about the link between within-firm task heter...More

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