Natural concentration in industrial research collaboration
In: The Rand journal of economics, Band 41, Heft 2, S. 351-371
ISSN: 1756-2171
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In: The Rand journal of economics, Band 41, Heft 2, S. 351-371
ISSN: 1756-2171
In: CESifo Working Paper No. 7552
SSRN
In: CEPR Discussion Paper No. DP13285
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Working paper
In: The B.E. journal of economic analysis & policy, Band 24, Heft 2, S. 649-658
ISSN: 1935-1682
Abstract
This paper contributes to the understanding of how brand scandals related to a brand leader's product affect the follower firm's choice between copycatting and independent product development. In a model of vertical product differentiation, we show that it is optimal for the copycatter to follow a 'safe distance' strategy which guarantees a certain degree of protection against the negative spillovers associated with a brand scandal to the leader. Nevertheless, when the follower firm can choose between copycatting and decoupling, it chooses a higher quality for its copycat product because of the lower development costs. The decision for or against copycatting thus depends on a trade-off between development costs and the possibility of negative spillovers. Finally, we show that the threat of a scandal can lead to an additional indirect welfare cost because it diverts the follower's choice away from a welfare-maximizing copycat strategy.
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In: Journal of public economics, Band 234, S. 105113
ISSN: 1879-2316
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Working paper
In: Journal of institutional and theoretical economics: JITE, Band 169, Heft 3, S. 519
ISSN: 1614-0559
In: International review of law and economics, Band 60, S. 105856
ISSN: 0144-8188