Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105096
Authors: 
Cao, Jiyun
Mukherjee, Arijit
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 5093
Abstract: 
It is believed that market power of the input supplier, charging a linear price, is detrimental for the consumers since it creates the double marginalisation problem. We show that this view may not be true if the final goods producers can adopt strategies to reduce rent extraction by the input supplier. Market power of the input supplier may encourage a final goods producer either to license its technology to a competitor or to adopt a less distortionary technology licensing contract. Both these effects may create higher consumer welfare under market power of the input supplier compared to a competitive input market.
Subjects: 
consumer surplus
labour union
technology licensing
JEL: 
J51
L12
L13
L24
Document Type: 
Working Paper

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