Welfare-improving cooperation with a consumer-friendly multiproduct corporation
Mariel Leal and
Sang-Ho Lee ()
MPRA Paper from University Library of Munich, Germany
This paper considers a multiproduct corporation that adopts consumer-friendly activities and cooperates with single plant ﬁrms for improving welfare. Comparing competition and (full or partial) cooperation, we show that full cooperation is socially beneﬁcial if products are strong complements, whereas partial cooperation with a higher consumer-friendly activities is beneﬁcial if products are substitutes. We also examine a sequential choice game of endogenous cooperation in which the multiproduct corporation can induce cooperation and show that our ﬁndings are supportive at equilibrium. We ﬁnally compare diﬀerent ownerships of the single plant ﬁrms and ﬁnd that foreign ownership decreases the beneﬁts of cooperation. Therefore, a cooperation with multiproduct corporation should be accompanied with active governmental guideline for promoting consumer friendly activities.
Keywords: consumer-friendly activities; full cooperation; partial cooperation; multiproduct corporation; welfare-improving cooperation (search for similar items in EconPapers)
JEL-codes: D43 L13 L21 L44 (search for similar items in EconPapers)
Date: 2020-01, Revised 2020-01
New Economics Papers: this item is included in nep-com and nep-env
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Journal Article: Welfare‐improving cooperation with a consumer‐friendly multiproduct corporation (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:98420
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