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Asymmetric Oligopoly and Technology Transfers

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  • La Manna, Manfredi M A

Abstract

Using a simple Cournot model, this paper shows that (1) if technologies are perfectly replicable, then a lower-cost firm has always an incentive to transfer its technology and, as a result, a fully asymmetric oligopoly can never be a noncooperative Nash equilibrium; (2) as a technology transfer between any two firms can always be disrupted by some other firm, the Cournot game cum technology transfer has no noncooperative Nash equilibria in pure strategies; and (3) there exi st nonlinear transfer payments that sustain the fully collusive outcome as an noncooperative Nash equilibrium even in a finitely repeated game. Copyright 1993 by Royal Economic Society.

Suggested Citation

  • La Manna, Manfredi M A, 1993. "Asymmetric Oligopoly and Technology Transfers," Economic Journal, Royal Economic Society, vol. 103(417), pages 436-443, March.
    • Handle: RePEc:ecj:econjl:v:103:y:1993:i:417:p:436-43
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    Cited by:

    1. Masahiko Hattori & Yasuhito Tanaka, 2020. "License Fees in Oligopoly When Outside Innovator can Enter the Market: Two-Step Auction," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-15, September.
    2. Hattori, Masahiko & Tanaka, Yasuhito, 2016. "License or entry in oligopoly," MPRA Paper 73547, University Library of Munich, Germany.
    3. Masahiko Hattori & Yasuhito Tanaka, 2018. "License and Entry Strategies for an Outside Innovator Under Duopoly with Combination of Royalty and Fixed Fee," Journal of Industry, Competition and Trade, Springer, vol. 18(4), pages 485-502, December.
    4. Masahiko Hattori & Yasuhito Tanaka, 2016. "Subsidizing New Technology Adoption in a Stackelberg Duopoly: Cases of Substitutes and Complements," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 2(2), pages 197-215, July.
    5. Leon Yang Chu & Yunzeng Wang, 2015. "Bundled Procurement for Technology Acquisition and Future Competition," Manufacturing & Service Operations Management, INFORMS, vol. 17(2), pages 249-261, May.
    6. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "Royalty and license fee under vertical differentiation in oligopoly with or without entry of innovator: Two-step auction," MPRA Paper 78859, University Library of Munich, Germany.
    7. Masahiko Hattori & Yasuhito Tanaka, 2018. "License and Entry Strategies for an Outside Innovator Under Duopoly," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(1), pages 135-152, March.
    8. Masahiko Hattori & Yasuhito Tanaka, 2017. "Competitiveness of Firm Behavior and Public Policy for New Technology Adoption in an Oligopoly," Journal of Industry, Competition and Trade, Springer, vol. 17(2), pages 135-151, June.
    9. Ding, Rong & Ko, Chiu Yu, 2021. "Does licensing improve welfare with rent dissipation?," Economic Modelling, Elsevier, vol. 105(C).
    10. Masahiko Hattori & Yasuhito Tanaka, 2016. "License or entry with vertical differentiation in duopoly," Economics and Business Letters, Oviedo University Press, vol. 5(1), pages 17-29.
    11. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "Vertical differentiation in oligopoly and license fees when outside innovator can enter the market: Two-step auction," MPRA Paper 78987, University Library of Munich, Germany.
    12. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "License and entry strategies for outside innovator in duopoly," MPRA Paper 76444, University Library of Munich, Germany.
    13. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "License and entry strategies for an outside innovator in duopoly with combination of royalty and fixed fee under vertical differentiation," MPRA Paper 78856, University Library of Munich, Germany.
    14. Creane, Anthony & Ko, Chiu Yu & Konishi, Hideo, 2013. "Choosing a licensee from heterogeneous rivals," Games and Economic Behavior, Elsevier, vol. 82(C), pages 254-268.
    15. Chiu Yu Ko & Bo Shen & Xuyao Zhang, 2023. "Can corruption encourage clean technology transfer?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(3), pages 459-492, June.
    16. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "License and entry decision for innovating firm in international duopoly under vertical differentiation," MPRA Paper 78995, University Library of Munich, Germany.
    17. Fan, Cuihong & Jun, Byoung Heon & Wolfstetter, Elmar G., 2018. "Optimal licensing of technology in the face of (asymmetric) competition," International Journal of Industrial Organization, Elsevier, vol. 60(C), pages 32-53.
    18. Hattori, Masahiko & Tanaka, Yasuhito, 2017. "Royalty and license fee under oligopoly with or without entry of innovator: Two-step auction," MPRA Paper 78858, University Library of Munich, Germany.
    19. Masahiko Hattori & Yasuhito Tanaka, 2015. "Subsidy or tax policy for new technology adoption in duopoly with quadratic and linear cost functions," Economics Bulletin, AccessEcon, vol. 35(2), pages 1423-1433.
    20. Masahiko Hattori & Yasuhito Tanaka, 2020. "Entry of Innovator and License in Oligopoly," Journal of Industry, Competition and Trade, Springer, vol. 20(4), pages 709-731, December.

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