Alliance Partner Choice in Markets with Vertical and Horizontal Externalities

Keisuke Hattori and Ming Hsin Lin

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the choice between complementary and parallel alliances in a market with vertical and horizontal externalities. One composite goods firm competes with two components producers, each providing a complementary component of a differentiated com- posite good. Although the joint profits from a parallel alliance between the composite goods firm and a components producer are always larger than those from a complementary alliance between components producers, through Nash bargaining, a components producer prefers the complementary (parallel) alliance when the degree of product differentiation is sufficiently large (small). Combined with the result that a complementary alliance is socially preferable, our findings provide meaningful implications for antitrust policy.

Keywords: Complementary alliance; Parallel alliance; Nash bargaining; Antitrust policy (search for similar items in EconPapers)
JEL-codes: L11 L13 L41 (search for similar items in EconPapers)
Date: 2010-10-08
New Economics Papers: this item is included in nep-com and nep-mic
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Related works:
Journal Article: Alliance Partner Choice in Markets with Vertical and Horizontal Externalities (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:25732

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