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Collusion in Supply Functions under Technology Licensing

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  • Celen, Ihsan
  • Saglam, Ismail

Abstract

We consider an infinitely-lived duopoly with asymmetric costs and study the incentives of the firms to collude or compete in supply functions under the possibility of technology licensing. Simulating the subgame-perfect Nash equilibria of alternative industry organizations, we show that licensing makes collusion harder; but it always has a positive effect on the welfares of consumers and the less efficient firm in the duopoly.

Suggested Citation

  • Celen, Ihsan & Saglam, Ismail, 2021. "Collusion in Supply Functions under Technology Licensing," MPRA Paper 107261, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:107261
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    References listed on IDEAS

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    Cited by:

    1. Saglam, Ismail, 2022. "Monopoly Persistence under the Threat of Supply Function Competition," MPRA Paper 111829, University Library of Munich, Germany.

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    More about this item

    Keywords

    Duopoly; collusion; supply function equilibrium; licensing.;
    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
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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