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RJVs and Price collusion Under Endogenous Product Differentiation

Author

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  • Lambertini, L.
  • Poddar, S.
  • Sasaki, D.

Abstract

We characterize the interplay between firm's decisions in product development, be it joint or independent, and their ensuing repeated price behaviour, either collusive or Bertrand-Nash. We prove that joint-product development and the resulting lack of horizontal differentiation may destabilise collusion, whilst firms' R&D decisions have on bearings on collusive stability in the vertical differentiation setting.

Suggested Citation

  • Lambertini, L. & Poddar, S. & Sasaki, D., 1998. "RJVs and Price collusion Under Endogenous Product Differentiation," Department of Economics - Working Papers Series 666, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:666
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    References listed on IDEAS

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    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
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    5. Chang, Myong-Hun, 1992. "Intertemporal Product Choice and Its Effects on Collusive Firm Behavior," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(4), pages 773-793, November.
    6. d'Aspremont, Claude & Jacquemin, Alexis, 1990. "Cooperative and Noncooperative R&D in Duopoly with Spillovers: Erratum," American Economic Review, American Economic Association, vol. 80(3), pages 641-642, June.
    7. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    8. Lambertini, Luca, 1997. "Prisoners' Dilemma in Duopoly (Super)Games," Journal of Economic Theory, Elsevier, vol. 77(1), pages 181-191, November.
    9. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
    10. Motta, Massimo, 1992. "Cooperative R&D and vertical product differentiation," International Journal of Industrial Organization, Elsevier, vol. 10(4), pages 643-661, December.
    11. Abreu, Dilip, 1986. "Extremal equilibria of oligopolistic supergames," Journal of Economic Theory, Elsevier, vol. 39(1), pages 191-225, June.
    12. Michael L. Katz, 1986. "An Analysis of Cooperative Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 527-543, Winter.
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    Cited by:

    1. Lambertini Luca, 2000. "Technology and Cartel Stability under Vertical Differentiation," German Economic Review, De Gruyter, vol. 1(4), pages 421-442, December.

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    More about this item

    Keywords

    RESEARCH AND DEVELOPMENT ; NEW TECHNOLOGY ; INNOVATIONS;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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