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    Competing or colluding in a stochastic environment

    Breccia, Adriana and Salgado-Banda, H. (2005) Competing or colluding in a stochastic environment. Working Paper. Birkbeck, University of London, London, UK.

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    This paper analyses collusion by innovative firms and the impact of patents in a continuous-time real options framework. Generalising earlier research by Smets and Dixit and Pindyck, a patent-investment race model is formulated in which innovative firms bargain and reach collusive agreements. It is shown that, while collusion always delays innovation, it does not necessarily delay competition. Depending on a number of factors, collusion can actually accelerate competition.


    Item Type: Monograph (Working Paper)
    Additional Information: BWPEF 0504
    Keyword(s) / Subject(s): bargaining, collusion, competition, geometric Brownian motion, Nash axiomatic approach, Stackelberg game.
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Administrator
    Date Deposited: 05 Apr 2019 08:38
    Last Modified: 02 Aug 2023 17:50


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