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ERIC Number: EJ1328398
Record Type: Journal
Publication Date: 2022
Pages: 7
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0883-2323
EISSN: N/A
The "Lim-O": An Exercise in Market Failure and Vertical Integration
Meilich, Ofer
Journal of Education for Business, v97 n1 p62-68 2022
Vertical integration and more generally, corporate-level strategy, are rather difficult for students to grasp, being such abstract concepts. This exercise provides a way for participants to experience issues leading to market failure (and vertical integration) by engaging them as buyers and sellers of a component for very unique car--a limousine with square tires. Suppliers for square tires are solicited, followed by post-contract renegotiation. The ensuing frustration and heated interactions are leveraged to explain the concepts of asset specificity and uncertainty, causing elevated risk, leading to lack of suppliers and buyers, and forcing firms to become their own suppliers.
Routledge. Available from: Taylor & Francis, Ltd. 530 Walnut Street Suite 850, Philadelphia, PA 19106. Tel: 800-354-1420; Tel: 215-625-8900; Fax: 215-207-0050; Web site: http://www.tandf.co.uk/journals
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A