It is believed that market power of the input supplier, charging a linear price, is detrimental for the consumers since it creates the double marginalisation problem. We show that this view may not be true if the final goods producers can adopt strategies to reduce rent extraction by the input...

We show that the presence of a strategic tax policy increases the incentive for a horizontal merger compared to the situation with no tax policy. Thus, we point towards a new factor, viz., strategic tax policy, for increasing the incentive for a horizontal merger that has been ignored in the...

We show the effects of the bargaining power of labour unions on product innovation under decentralised and centralised wage bargaining. In this context, we show the implications of preference function, which affects the market size. A higher union bargaining power increases innovation if...

This paper examines how the option for licensing affects research and development (R&D) and social welfare.We find that if cost reduction from R&D is sufficiently small and there is an option of licensing, firms will do non-cooperative R&D. In absence of licensing, firms will do cooperative R&D...

This paper introduces "harassment" in a model of bribery and corruption. We characterize the harassment equilibrium and show that taxpayers with all possible levels of income participate in such an equilibrium. Harassment has a regressive bias. Harassment cost as such may not affect tax revenue....

Once a new technology has been invented, there is a credible threat of imitation when patent protection is strong and imitation cost is low. Within the area of credible imitation, the innovator has an incentive to postpone technology adoption when the cost of imitation is relatively high. The...

In developing countries undergoing liberalising economic reforms, there are typically local incumbents facing the loss of protection. Strategic lobbying by such firms for a price-capping regulatory regime is, under certain conditions, one way in which they can deter entry by competitors who are...

This paper investigates the effect of different patent regimes on R&D investment and social welfare in a duopoly market with uncertain R&D process. We find that strong patent protection increases R&D investment of at least one firm but whether both firms? R&D investment will be more under strong...

We use a duopoly to show how the possibility of licensing ex post R&D affects the decision on R&D organization. We show that whether licensing ex post R&D affects the incentive for doing cooperative R&D depends on the nature of cooperative R&D. If the firms do cooperative R&D to avoid...

We consider the possibility of forming a joint venture (JV) between a local firm and a foreign multinational in a situation when there is no current gain from such an arrangement. In the presence of policy uncertainty and threat of entry, a current period formation of JV with the multinational,...