The classical view of producers selling directly to final consumers is the exception rather than the rule in modern economies. In most markets, producers and consumers interact with each other through retailers and other intermediaries. The typical production structure is, therefore, one of vertical chains, where both sellers and buyers have some degree of market power. The goal of our research project is to gain a deeper understanding on how an explicit account of the vertically separated structure of value chains affects market performance. We focus on the effect of imperfect competition in vertical chains. In particular, we ask how the balance of market power within the vertical structure affects economic efficiency in general and prices, quality, and the product variety of products in particular. Ultimately, our proposed research on vertical chains is meant to lead to robust guidelines for policy makers in the arena of modern competition policy. Although some important work on vertical chains has been done, there are many open questions, especially with regard to the policy implications of market power in vertical structures. At present the participating investigators are already working independently on different issues of vertical chains. This research proposal unites and unifies these diverse efforts into a focused research group. Our group will increase the interaction between the participants, avoid duplication of research efforts, and benefit from complementarities in order to advance research on vertical production chains. The overall project is structured in four modular work packages. In the first work package we deal with the mode of competition in vertical structures, where we focus on the role of price discrimination, resale price maintenance, and collusion. Work package 2 focuses on buyer power; in particular, the determinants of buyer power and its effects on investment incentives and product quality outcomes. In work package 3 we consider complementarities (provoked by one-stop shopping preferences) in the production chain and how they affect integration incentives and location choice. Finally, in work package 4, we analyze the issue of consumers’ imperfect quality information on the organization of vertical chains where we focus on issues of certification and branding of products

Piezoresistance (PZR), the change of electrical resistivity with an externally applied mechanical stress, is well known and was first measured in silicon almost 60 years ago. In addition to revealing details of the band structure, PZR is exploited in a number of diverse stress sensing applications. Recent literature shows an increasing interest in the use of PZR for the detection of micro- and nanosystems movements. In most cases it is desirable to have the largest sensitivity possible, either to enable the detection of nanoscale movements or to reduce device power consumption. Clearly silicon is the preferred material since integrable devices are possible in a material with highly attractive mechanical properties. However the PZR coefficients in silicon cannot exceed -104 x 10-11 Pa-1. While sufficient for many applications, this is too small for a number of others including those addressed below. Recent reports of “giant” PZR in other materials, or in silicon micro- and nanostructures, including our own, have therefore been hailed as offering a way over the -104 x 10-11 Pa-1 barrier that will enable a number of new PZR technologies. The main objectives of the current project are threefold: i) understand the origin of a giant PZR observed in silicon nanowires, ii) investigate a two-terminal version of a geometric effect previously reported in four-terminal silicon microstructures, and iii) demonstrate the utility of this approach for two specific sensing applications. The origin of the PZR in suspended silicon nanowires, more than 30 times larger than in bulk silicon is not clear. Suggested explanations include an enhanced bulk effect, a quantum mechanical effect and an electrostatic surface depletion effect first described by us. For use in eventual applications, and from a purely scientific viewpoint, it is necessary to further investigate this phenomenon. It is our intention to test the electrostatic model via lateral PZR measurements on surface depletion layers in silicon. In order to respectively rule out the first two possibilities, longitudinal and transverse stress measurements on micrometer sized devices will be performed. The electrostatic effect should also depend on the surface Fermi energy, which can be modified via surface chemical functionalization. The effect of chemical treatments on the PZR will also be investigated. Recently the current project partners reported an enhanced PZR in artificially structured silicon resistors. This effect was demonstrated in four-terminal devices, making them difficult to integrate with standard electronic bridge circuits and reducing the sensitivity. The general concept, stress-induced current switching away from a metallic short circuit, should however be valid for two-terminal devices at large uniaxial stresses of the order of several hundred MPa where a divergence of the resistance with applied stress is expected. In this case, large incremental PZR coefficients for small stress changes about a large offset stress should be possible. This idea, which will be tested in a mechanical press, was the basis of a recent patent submission that has attracted the interest of potential commercial partners. Either of these concepts could prove useful for the nanoscale movement detection in microsystems. To this end, in a second phase of the project we wish to develop a process to integrate sensors based on one or both of these concepts onto membranes or cantilevers. The resulting devices will be compatible with the applications envisaged in the final phase of the project. Two specific applications will be targeted, i) all-electrical atomic force microscopy (AFM) and ii) ultra-sensitive silicon membrane pressure sensors. Evaluation of prototype performance will be via comparison with the current state-of-the-art devices and techniques, in particular optical detection of cantilever motion in AFM and pressure sensitivity of commercial silicon pressure sensors.