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On bilateral agreements: just a matter of matching

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Abstract

This paper aims at assessing the importance of the initial technological endowments when firms decide to establish a technological agreement. We propose a Bertrand duopoly model where firms evaluate the advantages they can get from the agreement according to its length. Allowing them to exploit a learning process, we depict a strict connection between the starting point and the final result. Moreover, as far as learning is evaluated as an iterative process, the set of initial conditions that lead to successful ventures switches from a continuum of values to a Cantor set.

Suggested Citation

  • Xavier Martinez-Giralt & Rosella Nicolini, 2002. "On bilateral agreements: just a matter of matching," UFAE and IAE Working Papers 548.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    • Handle: RePEc:aub:autbar:548.02
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    More about this item

    Keywords

    Bertrand competition; Duopoly; Learning; Firm agreements;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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