Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation

Iori, Cristina ; Lambertini, Luca (2000) Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation. DOI 10.6092/unibo/amsacta/689.
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Abstract

We describe a vertically differentiated 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 oneshot 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 procompetitive attitude characterising the current legislation on marketing practices.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Iori, Cristina
Lambertini, Luca
Keywords
product quality R&D investment implicit collusion joint venture independent ventures
Subjects
DOI
Deposit date
17 Jun 2004
Last modified
17 Feb 2016 14:01
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