Asymmetric Oligopoly and Technology Transfers

Manfredi M A La Manna

Economic Journal, 1993, vol. 103, issue 417, 436-43

Abstract: Using a simple Cournot model, this paper shows that (1) if technologies are perfectly replicable, then a lower-cost firm has always an incentive to transfer its technology and, as a result, a fully asymmetric oligopoly can never be a noncooperative Nash equilibrium; (2) as a technology transfer between any two firms can always be disrupted by some other firm, the Cournot game cum technology transfer has no noncooperative Nash equilibria in pure strategies; and (3) there exi st nonlinear transfer payments that sustain the fully collusive outcome as an noncooperative Nash equilibrium even in a finitely repeated game. Copyright 1993 by Royal Economic Society.

Date: 1993
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