Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26918
Authors: 
Engel, Christoph
Year of Publication: 
2007
Series/Report no.: 
Preprints of the Max Planck Institute for Research on Collective Goods 2007,6
Abstract: 
Two suppliers of a homogenous good know that, in the second period, they will be able to collude. Gains from collusion are split according to the Nash bargaining solution. In the first period, either of them is able to invest into process innovation. Innovation changes the status quo pay-off, and thereby affects the distribution of the gains from collusion. The resulting innovation incentive is strictly smaller than in the competitive case.
Subjects: 
Duopoly
Collusion
Innovation Incentives
JEL: 
D43
K21
L13
O31
Document Type: 
Working Paper

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