Incentives for process innovation in a collusive duopoly

Two suppliers of a homogenous good know that, in the second period, they will be able to collude. Gains from collusion are split according to the Nash bargaining solution. In the first period, either of them is able to invest into process innovation. Innovation changes the status quo pay-off, and thereby affects the distribution of the gains from collusion. The resulting innovation incentive is strictly smaller than in the competitive case.

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Year of publication:	2007
Authors:	Engel, Christoph
Publisher:	Bonn : Max Planck Institute for Research on Collective Goods
Subject:	Innovation \| Ökonomischer Anreiz \| Innovationswettbewerb \| Wettbewerbsbeschränkung \| Immaterialgüterrechte \| Theorie \| Duopoly \| Collusion \| Innovation Incentives

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Series:	Preprints of the Max Planck Institute for Research on Collective Goods ; 2007,6
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	551497998 [GVK] hdl:10419/26918 [Handle]
Classification:	D43 - Oligopoly and Other Forms of Market Imperfection ; K21 - Antitrust Law ; L13 - Oligopoly and Other Imperfect Markets ; O31 - Innovation and Invention: Processes and Incentives
Source:	EconStor

Persistent link: https://www.econbiz.de/10010264811