Arbeitspapier

Technology spillovers and outside options in a bilateral duopoly

This paper examines the role of outside options in a downstream duopoly with exclusive vertical relations as in the Japanese automobile industry. In our setup, the downstream firms have outside options, and two upstream firms with exclusive relations can engage in cost reducing investments. More interestingly, each upstream firm can choose whether to voluntarily generate technology spillovers to its rival. We show that better outside options of the downstream firms can induce voluntary technology spillovers in the upstream level, increasing the profits of all firms on the vertical chain.

Language
Englisch

Bibliographic citation
Series: ISER Discussion Paper ; No. 1039

Classification
Wirtschaft
Oligopoly and Other Imperfect Markets
Management of Technological Innovation and R&D
Production Management
Noncooperative Games
Subject
Strategic sourcing
Outside option
Spillovers
Vertical relations

Event
Geistige Schöpfung
(who)
Matsushima, Noriaki
Zhao, Laixun
Event
Veröffentlichung
(who)
Osaka University, Institute of Social and Economic Research (ISER)
(where)
Osaka
(when)
2018

Handle
Last update
10.03.2025, 11:43 AM CET

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Object type

  • Arbeitspapier

Associated

  • Matsushima, Noriaki
  • Zhao, Laixun
  • Osaka University, Institute of Social and Economic Research (ISER)

Time of origin

  • 2018

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