Optimal contract under brand name collaboration

Debasmita Basak and Arijit Mukherjee

Economic Modelling, 2014, vol. 37, issue C, 238-240

Abstract: In an international Cournot duopoly, we determine the optimal contract for a brand name collaboration where the contract consists of fixed-fee and output royalty. We show that the firms always have the incentive for brand name collaboration. However, whether the optimal contract will have positive fixed-fee and positive royalty is not immediate and it depends on the factors such as the transportation cost of exporting and the consumers' initial perception about the products of the firms reflected in the consumers' maximum willingness to pay for the products. Thus, our paper shows that the possibility of brand name collaboration is significantly more than predicted in the existing literature.

Keywords: Brand name collaboration; Fixed-fee; Royalty (search for similar items in EconPapers)
JEL-codes: D43 D45 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:37:y:2014:i:c:p:238-240

DOI: 10.1016/j.econmod.2013.11.008

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