Technology sharing incentives for monopolistic firms

Takahiro Ishii
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Takahiro Ishii: Graduate School of Economics, Osaka University

No 21-05, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: The present study examines the effects of free technology sharing by a monopolistic final-good firm with other final-good firms. To this end, we consider two cases-first, where there exists one final-good firm in the final-good market and second, where there exist two final-good firms in the final-good market. Considering the free entry into the differentiated intermediate-goods market , the results of this study show that, when another firm enters the final-good market and transforms it into a two-firm oligopoly, cost efficiency improves because of an increase in the number of intermediate-goods firms. Furthermore, there is a possibility that the incumbent firm fs profits increases not only for a two-firm oligopoly, but also for an oligopoly with three or more firms. Thus, sharing technology for free could improve the profits of incumbent firms.

Keywords: Monopolistic competition; Endogenous variety of intermediate goods; T echnology sharing; Intermediate goods; Technology transfer (search for similar items in EconPapers)
JEL-codes: D43 L13 L16 (search for similar items in EconPapers)
Pages: 35pages
Date: 2021-05
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-mic and nep-reg
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