It bears emphasizing that disinclinations to cooperate even in implicit fashion must surely have a direct effect on the decision to make or buy; an inclination to cooperate implicitly but not explicitly may unambiguously encourage buying rather than making even where a competitor could internally produce -- perhaps more than it needs of some component -- at a lower cost than that associated with the best outside supplier.
Part III discusses the possible role of consumer ignorance in understanding disinclinations to cooperate quite generally, but, as for the narrower question of the preference for explicit rather than implicit cooperation, it is difficult to make much of consumer ignorance.
The major weakness with the signaling and product differentiation explanations is that they fail to explain the mix of implicit cooperation and contrary disinclinations.
Both pride and negative signals might explain that set of disinclinations, with pride perhaps dominating if the perception is that Harvard and MIT cooperate relatively frequently.
For what it is worth, I have not yet encountered a faculty member or administrator at Columbia or NYU who thought those schools' behavior could be explained by anything but unilateral or mutual disinclinations to cooperate.
Part of my claim, or at least of my starting point, is that the make-or-buy decision is influenced by an apparent disinclination in some cases to share sources of supply with one's competitors.
It is thus immediately apparent that a disinclination to cooperate bears on the size of the firm.
Insufficient attention has been paid to what I have been calling the disinclination to cooperate.
Most readers, however, will share in the observation that competitors often manifest a disinclination to cooperate.
A twice-removed supplier may thus overcome the disinclination to cooperate precisely because of its increased separation from both competitors.