Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation.

Lambertini, Luca ; Iori, Cristina (2000) Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation. Bologna: Dipartimento di Scienze economiche DSE, p. 19. DOI 10.6092/unibo/amsacta/4924. In: Quaderni - Working Paper DSE (385). ISSN 2282-6483.
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Abstract

We describe a vertically di¤erentiated market where firms choose between activating either independent ventures leading to distinct product qualities, or a joint venture for a single quality. Then, firms either repeat the one-shot Nash equilibrium forever, or behave collusively, according to discount factors. We prove that there exists a parameter region where the joint venture makes it more difficult for firms to sustain collusive behaviour, as compared to independent ventures. Therefore, public policies towards R&D behaviour should be designed so as not to become inconsistent with the pro-competitive attitude characterising the current legislation on marketing practices.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Iori, Cristina
Keywords
product quality, R&D investment, implicit collusion, joint venture, independent ventures
Subjects
ISSN
2282-6483
DOI
Deposit date
01 Apr 2016 11:48
Last modified
01 Apr 2016 11:48
URI

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