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Cooperation vs. Collusion: How Essentiality Shapes Co-opetition

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  • Rey, Patrick
  • Tirole, Jean

Abstract

The paper makes two related contributions. First, and in contrast with the rich body of literature on collusion with (mainly perfect) substitutes, it derives general results on the sustainability of tacit coordination for a class of nested demand functions that allows for the full range between perfect substitutes and perfect complements. Second, it studies the desirability of joint marketing alliances, an alternative to mergers. It shows that a combination of two informationfree regulatory requirements, mandated unbundling by the joint marketing entity and unfettered independent marketing by the firms, makes joint-marketing alliances always socially desirable, whether tacit coordination is feasible or not.

Suggested Citation

  • Rey, Patrick & Tirole, Jean, 2013. "Cooperation vs. Collusion: How Essentiality Shapes Co-opetition," IDEI Working Papers 801, Institut d'Économie Industrielle (IDEI), Toulouse.
    • Handle: RePEc:ide:wpaper:27696
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Pierre Larouche & Florian Schuett, 2019. "Repeated interaction in standard setting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 488-509, June.
    2. Gerard Llobet & Jorge Padilla, 2016. "The Inverse Cournot Effect in Royalty Negotiations with Complementary Patents," Working Papers wp2016_1608, CEMFI.
    3. Zhijun Chen & Patrick Rey, 2019. "Competitive cross‐subsidization," RAND Journal of Economics, RAND Corporation, vol. 50(3), pages 645-665, September.
    4. Jóna, György, 2020. "Versengő együttműködés versus összejátszás, avagy hálózati szintű csalás? [Coopetition versus collusion, or fraud at network level?]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(2), pages 164-180.
    5. Ángel L. López & Xavier Vives, 2019. "Overlapping Ownership, R&D Spillovers, and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 127(5), pages 2394-2437.
    6. Jay Pil Choi & Heiko Gerlach, 2015. "Patent pools, litigation, and innovation," RAND Journal of Economics, RAND Corporation, vol. 46(3), pages 499-523, September.
    7. David Encaoua, 2014. "Kaplow, Louis: Competition policy and price fixing," Journal of Economics, Springer, vol. 113(2), pages 205-209, October.
    8. Josh Lerner & Jean Tirole, 2015. "Standard-Essential Patents," Journal of Political Economy, University of Chicago Press, vol. 123(3), pages 547-586.
    9. López, Ángel L. & Vives, Xavier, 2016. "Cross-ownership, R&D Spillovers, and Antitrust Policy," IESE Research Papers D/1140, IESE Business School.
    10. Aleksandra Boutin, 2016. "Screening for Good Patent Pools through Price Caps on Individual Licenses," American Economic Journal: Microeconomics, American Economic Association, vol. 8(3), pages 64-94, August.
    11. Drew Fudenberg, 2015. "Tirole's Industrial Regulation and Organization Legacy in Economics," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 771-800, July.
    12. Shastitko, Andrei (Шаститко, Андрей), 2015. "A new look at the antimonopoly control of horizontal agreements [Новый Взгляд На Антимонопольный Контроль Горизонтальных Соглашений]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 134-154.
    13. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, November.
    14. Tesoriere, Antonio, 2019. "Stable sharing rules and participation in pools of essential patents," Games and Economic Behavior, Elsevier, vol. 117(C), pages 40-58.
    15. Tarantino, Emanuele & Reisinger, Markus, 2016. "Patent Pools in Input Markets," CEPR Discussion Papers 11512, C.E.P.R. Discussion Papers.
    16. Spielmann, Nathalie & Williams, Christopher, 2016. "It goes with the territory: Communal leverage as a marketing resource," Journal of Business Research, Elsevier, vol. 69(12), pages 5636-5643.
    17. Carmen D à lvarez-Albelo & José A Martínez-González, 2024. "Should antitrust regulators be wary of inter-firm coordination agreements through a tourism destination card?," Tourism Economics, , vol. 30(2), pages 324-344, March.
    18. Lindblom Ted & Mallios Aineas & Sjögren Stefan, 2024. "A Theoretical Analysis of Collusion Involving Technology Licensing Under Diseconomies of Scale," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 24(1), pages 263-297, January.
    19. Thomas D. Jeitschko & Yeonjei Jung & Jaesoo Kim, 2017. "Bundling and joint marketing by rival firms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(3), pages 571-589, September.

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    More about this item

    Keywords

    tacit collusion; cooperation; substitutes and complements; essentiality; joint marketing agreements; patent pools; independent licensing; unbundling; co-opetition;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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