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Collusion in supply functions under technology licensing

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  • Ihsan Celen
  • Ismail Saglam

Abstract

We consider an infinitely lived duopoly with asymmetric costs and study the incentives of the firms to collude or compete in supply functions under the possibility of technology licensing. Simulating the subgame‐perfect Nash equilibria of alternative industry organizations, we show that licensing makes collusion harder; but it always has a positive effect on the welfares of consumers and the less efficient firm in the duopoly.

Suggested Citation

  • Ihsan Celen & Ismail Saglam, 2022. "Collusion in supply functions under technology licensing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1362-1378, July.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:5:p:1362-1378
    DOI: 10.1002/mde.3460
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    Cited by:

    1. Saglam, Ismail, 2022. "Monopoly Persistence under the Threat of Supply Function Competition," MPRA Paper 111829, University Library of Munich, Germany.

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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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