Report
RJVs and price collusion under endogenous product differentiation
Research paper (University of Melbourne. Department of Economics), no. 666, University of Melbourne, Department of Economics
1998
Abstract
We characterise the interplay between firms' decisions in product development, be it joint or independent, and their ensuing repeated price behaviour, either collusive or Bertrand-Nash. Firms face a choice between participating in a joint venture inventing a single product, and in independent ventures developing their respective products which can be either horizontally or vertically differentiated. We prove that joint product development and the resulting lack of horizontal product differentiation may destabilise collusion, whilst firms' R&D decisions have no bearings on collusive stability in the vertical differentiation setting. We also discover the non-monotone dependence of firms' venture decisions at the development stage upon their intertemporal preferences, as well as upon consumers' willingness to pay.
Details
- Title: Subtitle
- RJVs and price collusion under endogenous product differentiation
- Creators
- Luca LambertiniSougata PoddarDan Sasaki
- Resource Type
- Report
- Series
- Research paper (University of Melbourne. Department of Economics); no. 666
- ISBN
- 9780732509231; 0732509238
- Publisher
- University of Melbourne, Department of Economics; Parkville, Victoria
- Number of pages
- 31 pages
- Language
- English
- Date published
- 1998
- Academic Unit
- Economics
- Record Identifier
- 9984963441702771
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