RJV in Product Innovation and the Form of Market Competition

Lambertini, Luca ; Sasaki, Dan ; Poddar, Sougata (1999) RJV in Product Innovation and the Form of Market Competition. Bologna: Dipartimento di Scienze economiche DSE, p. 20. DOI 10.6092/unibo/amsacta/4966. In: Quaderni - Working Paper DSE (343). ISSN 2282-6483.
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Abstract

We inspect the interlink between the endogenous choice of price- and quantity- setting behavior in an oligopolic market, and cost sharing among oligopolists. A typical situation of this sort is an oligopoly game where firms invest in product development first, and ten play a marketing game later. Only in the initial investment stage ,the firms set up a joint venture in order to share the costs. We discover that, in the presence of shared costs, the well-established result by Singh and Vives (1984) that firms endogenously choose quantity (resp., price) as a dominant strategy when their products are substitutes (resp., complements) may not be the only equilibrium outcome. In particular, the procedural order between firms` cost sharing decisions and their marketing decisions make a key difference in the resulting equilibrium profiles.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Sasaki, Dan
Poddar, Sougata
Keywords
joint venture, repayment, subgame perfection, Nash bargaining
Subjects
ISSN
2282-6483
DOI
Deposit date
05 Apr 2016 09:30
Last modified
05 Apr 2016 09:30
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