Competitor collaboration and product distinctiveness
Competitors often collaborate by sharing a part of value-creating activities such as technology development, product design, and distribution, which are important elements for creating product distinctiveness. Competitor collaborations have recently been regarded as crucial issues by antitrust authorities. Although collaboration between competitors reduces their product distinctiveness, it may increase the distinctiveness between their products and a non-collaborator's product. Also, intensified competition between collaborators lowers their prices and imposes downward pressure on non-collaborator's pricing strategy. We demonstrated that the interaction between these effects yields rich antitrust implications for competitor collaborations and a new perspective on welfare consequences of partial ownership arrangements.
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