RJVs and Price Collusione under Endogenous Product Differentiation

Lambertini, Luca ; Poddar, Sougata ; Sasaki, Dan (1998) RJVs and Price Collusione under Endogenous Product Differentiation. Bologna: Dipartimento di Scienze economiche DSE, p. 31. DOI 10.6092/unibo/amsacta/5015. In: Quaderni - Working Paper DSE (295). ISSN 2282-6483.
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Abstract

We characterise the interplay between firms' decisions in product development, be it joint or independent, and their ensuing repeated price behaviour, either collusive or Bertrand- Nash. Firms face a choice between participating in a joint venture inventing a single product, and in independent ventures developing their respective products which can be either horizontally or vertically differentiated. We prove that joint product development and the resulting lack of horizontal product differentiation may destabilise collusion, whilst firms' R&D decisions have no bearings on collusive stability in the vertical differentiation setting. We also discover the non-monotone dependence of firms' venture decisions at the development stage upon their intertemporal preferences, as well as upon consumers' willingness to pay.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Poddar, Sougata
Sasaki, Dan
Keywords
R&D, product innovation, collusive stability, time discount factor, optimal punishment
Subjects
ISSN
2282-6483
DOI
Deposit date
05 Apr 2016 08:59
Last modified
05 Apr 2016 08:59
URI

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