A large part of economic transactions takes place through markets. On these markets, firms take decisions in response to prevailing market conditions that affect the well-being of market participants. Such decisions are relevant to the field of Industrial Organization (IO) and their analysis lies at the heart of this book. Industrial Organization: Markets and Strategies indeed aims at presenting the role of imperfectly competitive markets for private and social decisions.

Among the numerous decisions taken by firms is the make-or-buy decision, whereby firms compare the costs and benefits of manufacturing a product or service against purchasing it. Typically, the firm will prefer the ‘make’ option over the ‘buy’ option if the purchase price is higher than the in-house manufacturing cost or if outside suppliers are unreliable. Naturally, the firm must also have the necessary skills and equipment to meet its own product standards.

There is a clear analogy between this generic dilemma and the decision process that led us to write this book. As industrial organization teachers since the start of our academic careers, we have both long relied on existing textbooks to support our courses. Yet, through the years, our needs became different from the offers of outside suppliers. That is, the ‘make’ option started to become more tempting than the ‘buy’ option.