R&D investments fostering horizontal mergers

We study a homogenous good triopoly in which firms first choose their cost-reducing R&D investments and consider alternative merger proposals, and then compete à la Cournot in the ensuing industry. We identify conditions under which both horizontal mergers and non integration are sustained by Coalition-Proof Nash equilibria (CPNE). These conditions involve the effectiveness of the R&D technology, as well as the distribution of the bargaining power between the acquirer and the acquiree, which determine the allocation of the incremental profits generated by the merger. We show that whether firms follow duplicative or complementary research paths, sustaining a merger generally requires a sufficiently effective R&D technology that creates endogenous cost asymmetries and renders the merger profitable, and a moderate distribution of bargaining power that allows to spread the benefits of the merger. We examine the welfare effects of mergers and obtain clear policy guidelines.We would like to thank Lindsay McTeague for editorial assistance, and John Geanakoplos, Patrick Rey and participants of research seminars at Düsseldorf Institute for Competition Economics, the Higher School of Economics (Moscow), and the University of Cyprus for helpful comments and suggestions. Part of this work was supported by COST Action IS1104 “The EU in the new economic complex geography: models, tools and policy evaluation”. Moreno acknowledges financial support from the Ministerio Economía y Competitividad (Spain), grants ECO2014-55953-P and MDM2014-0431, and from the Comunidad de Madrid, grant S2015/HUM-3444

Unions' and firms' attitudes towards research joint ventures: When will the incentives be aligned?

This paper studies the relationship between unionization and innovation activity. Under a unionized labour market, we find that when R&D spillovers are relatively low (high), cooperative, as well as non-cooperative R&D is a strategic substitute (complement). Furthermore, irrespective of the spillover rate, cooperation increases firms' profits, whereas it increases union utility only if spillovers are sufficiently high. Alignment of incentives between firms and unions requires that firms pay transfers in the form of 'rent-sharing' to make a Research Joint Venture attractive to unions. Our results suggest that if spillovers are low enough, the amount of money that firms give up in order to buy unions' acquiescence weakens their incentives to form a Research Joint Venture. © 2007 The Authors; Journal compilation © 2007 CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd

Методичні вказівки до виконання лабораторних робіт і самостійної роботи з дисципліни «Інформаційні системи і технології» Для студентів 1 курсу денної та заочної форм навчання за напрямом 6.030601 – «Менеджмент»

We examine a duopoly with polluting production where firms adopt a form of corporate social responsibility (CSR) to define their objective functions. Our analysis focuses on the bearings of CSR on collusion over an infinite horizon, sustained by either grim trigger strategies or optimal punishments. Our results suggest that assigning a weight to consumer surplus has a pro-competitive effect under both full and partial collusion. Conversely, a higher impact of productivity on pollution has an anti-competitive effect under partial collusion, while exerting no effect under full collusion. Under partial collusion, the analysis of the isoquant map of the cartel reveals that complementarity arises between the two weights