Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation

Arbeitspapier

We describe a vertically di¤erentiated market where firms choose between activating either independent ventures leading to distinct product qualities, or a joint venture for a single quality. Then, firms either repeat the one-shot Nash equilibrium forever, or behave collusively, according to discount factors. We prove that there exists a parameter region where the joint venture makes it more difficult for firms to sustain collusive behaviour, as compared to independent ventures. Therefore, public policies towards R&D behaviour should be designed so as not to become inconsistent with the pro-competitive attitude characterising the current legislation on marketing practices.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Quaderni - Working Paper DSE ; No. 385

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lambertini, Luca ; Iori, Cristina
• Event: Veröffentlichung
• (who): Alma Mater Studiorum - Università di Bologna, Dipartimento di Scienze Economiche (DSE)
• (where): Bologna
• (when): 2000

Further information

• DOI: doi:10.6092/unibo/amsacta/4924
• Handle: http://hdl.handle.net/10419/159226
• Last update: 10.03.2025, 11:44 AM CET