Overview I Methods of Procuring Inputs Spot exchange Contracts Vertical Integration I. Transaction Costs a Specialized Investments III Optimal Procurement Input IV Principal-Agent Problem Owners-Managers Managers-Workers Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 Overview I. Methods of Procuring Inputs  Spot Exchange  Contracts  Vertical Integration II. Transaction Costs  Specialized Investments III. Optimal Procurement Input IV. Principal-Agent Problem  Owners-Managers  Managers-Workers