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Joint Venture for a New Product and Antitrust Exemptions

Author

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  • Maria R. Battaggion
  • Paolo G. Garella

Abstract

The present paper analyses different forms of organising a JV for the introduction of a new product. It is shown that under non contractible effort levels by the parent companies, a non cooperative solution, due to free‐riding, is less desirable than one where firms cooperate not only at the R&D but also at the selling stage. Also, allowing firms to set up a production JV may be an alternative way to improve upon the fully non cooperative solution. An Antitrust authority should therefore consider the possible destructive effects on the JV results of prohibitions of inter‐firm cooperation.

Suggested Citation

  • Maria R. Battaggion & Paolo G. Garella, 2001. "Joint Venture for a New Product and Antitrust Exemptions," Australian Economic Papers, Wiley Blackwell, vol. 40(3), pages 247-262, September.
    • Handle: RePEc:bla:ausecp:v:40:y:2001:i:3:p:247-262
    DOI: 10.1111/1467-8454.00125
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    Cited by:

    1. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Neubecker, Leslie, 2003. "Does cooperation in manufactoring foster tacit collusion," Tübinger Diskussionsbeiträge 261, University of Tübingen, School of Business and Economics.

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