Optimal Input Procurement S pot EXchange Substantial specialized Investments relative to Yes Complex contracting contracting costs? environment relative to costs of integration? No Ye Vertical Contract Integration 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 Optimal Input Procurement Substantial specialized investments relative to contracting costs? Spot Exchange No Complex contracting environment relative to costs of integration? Yes Vertical Integration Yes Contract No