Abuyer's technical knowledge may increase the efficiency of its supplier. Suppliers, however, frequently maintain relationships with additional buyers. Knowledge disclosure then bears the risk of benefiting one's own competitor due to opportunistic knowledge transmission through the common...

It is a common concern that pricing pressure by powerful buyers discourages suppliers' R&D investments. Employing a simple monopsonist - competitive upstream industry - framework, this paper qualifies this view in two respects. First, the monopsonist has an incentive to subsidize upstream R&D...