Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25972
Authors: 
Foros, Øystein
Hagen, Kåre P.
Kind, Hans Jarle
Year of Publication: 
2007
Series/Report no.: 
CESifo working paper 1927
Abstract: 
In this paper we show how an upstream firm can prevent destructive competition among downstream firms producing relatively close substitutes by implementing a price-dependent profit-sharing rule. The rule also ensures that the downstream firms undertake investments which benefit the industry in aggregate. The model is consistent with observations from the market for content commodities distributed by mobile networks.
Subjects: 
profit-sharing
vertical restraints
investments
competition
JEL: 
L13
L22
Document Type: 
Working Paper

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