Asymmetric capacity costs and joint venture buy-outs

In this paper, we build a simple theory of joint venture buy-outs based on asymmetric access to capital, synergy, and an increased market size. If the market size is small then the outcome involves joint venture formation. If, however, the market size becomes sufficiently large then a buy-out always occurs. (C) 2003 Elsevier B.V. All rights reserved.