Downstream R&amp;D, raising rivals’ costs, and input price contracts

Banerjee, Samiran; Lin, Ping

doi:10.1016/s0167-7187(02)00010-3

Cited by 79 publications

(77 citation statements)

References 10 publications

(8 reference statements)

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“…Sun Caihong, Yu Hui and others [9] studied the existence and evolution of opportunism. Brander and Spencer [10] began L. Lei, S. Wei American Journal of Industrial and Business Management to focus on commitment rather early, and they used definite function relationship to analyze commitment of horizontal joint R & D. Banerjee and Lin [11] studied the impact of constant price commitments on R & D activities. Sun Guoyan [12] and his partners believe that if manufacturers keep the price flexible and promised price, Internet plus integrated enterprises will invest more in innovation and have higher sales expectation.…”

Section: Introductionmentioning

confidence: 99%

Study on Community Cooperation Game of the Main Body in Regional Innovation Ecosystem

Lei¹,

Song²

2017

AJIBM

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Cooperative innovation of heterogeneous population is more and more important in regional innovation ecosystem, and cross-border cooperation has become one of the effective ways to break through the predicament of ecological niche development. However, the existence of opportunistic behavior will restrain the cooperation motivation among the main communities and threaten the stability of the ecosystem population cooperation network. In order to avoid possible speculation, participants tend to make commitments beforehand. However, how can the commitment effectively avoid partner speculation so as to improve cooperation performance? In this paper, we will study the community game strategy of main body in innovation under multivariate uncertainty, and analyze the impact of commitment on collaborative innovation action.

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Section: Introductionmentioning

confidence: 99%

Study on Community Cooperation Game of the Main Body in Regional Innovation Ecosystem

Lei¹,

Song²

2017

AJIBM

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“…For example, [12] study R&D investment in a one-to-one supply chain. [1,2] consider R&D investment in a one-to-many supply chain. [3,4] investigate R&D investment in a many-to-one supply chain.…”

Section: Introductionmentioning

confidence: 99%

Supplier's RaD Investment in Manufacturer in A Decentralized Supply Chain with Quality and Price Sensitive Demand

Zhang¹,

Ruo-yu²

2017

Proceedings of the 2017 International Conference on Management Science and Management Innovation (MSMI 2017)

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Abstract-This paper considers a supply chain with an upstream supplier and a downstream manufacturer, who faces a quality and price sensitive market demand. The supplier makes R&D investment in the manufacturer, which can lead to an improvement in the manufacturer's product quality, and hence, improve the efficiency of the entire supply chain. First, we derive the optimal retail price for the manufacturer, under any given R&D investment strategy of the supplier. Then, we characterize the supplier's optimal R&D investment strategy. We show that both the supplier and the manufacturer can benefit from such an investment, under certain condition.

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“…The focus of most models has been the impact of vertical integration on product costs and market competitiveness, in horizontal product differentiation models. The impact of such practices on long run variables such as quality, or R&D has mostly been ignored (with the exception of Stefanadis (1997), Banerjee and Lin (2003) and Brocas (2003) who look at R&D). In this paper we show that while the direct affect of vertical integration and foreclosure is an increase in production costs, it subsequently affects investment in quality for both the integrated and the non-integrated firm.…”

Section: Introductionmentioning

confidence: 99%

“…In his model firms integrate strategically to reduce the incentives of the non-integrated upstream firm to invest in R&D. This is achieved through a reduction in demand for the input, subsequently obtaining a advantageous position in the final goods market. Banerjee and Lin (2003) study the effect of downstream innovation in vertically related markets. By increasing demand for the input, downstream R&D increases the price for the downstream firm.…”

Section: Introductionmentioning

confidence: 99%

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Vertical integration, market foreclosure and quality investment

González

Kujal

2011

Port Econ J

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Incentives to vertically integrate are studied in an industry where downstream firms are vertically differentiated. Vertical integration by one of the firms increases production costs for the rival.Increased production costs impact quality investment both by the integrated firm and the unintegrated rival. A firm, integrating first, always produces the high quality good and earns higher profits. Quality investment by both firms decreases under any (vertical integration) scenario and competition among downstream firms is softened. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration. Keywords: L1, L4, L5, L13 .JEL Classification: Vertical Differentiation, quality investment, foreclosure, production costs Abstract Incentives to vertically integrate are studied in an industry where downstream firms are vertically differentiated. Vertical integration by one of the firms increases production costs for the rival. Increased production costs impact quality investment both by the integrated firm and the unintegrated rival. A firm, integrating first, always produces the high quality good and earns higher profits. Quality investment by both firms decreases under any (vertical integration) scenario and competition among downstream firms is softened. A fully integrated industry, with increased product differentiation, is observed in equilibrium. Due to increase in firm profits, social welfare under this structure is greater than under no integration.

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Downstream R&D, raising rivals’ costs, and input price contracts

Cited by 79 publications

References 10 publications

Study on Community Cooperation Game of the Main Body in Regional Innovation Ecosystem

Study on Community Cooperation Game of the Main Body in Regional Innovation Ecosystem

Supplier's RaD Investment in Manufacturer in A Decentralized Supply Chain with Quality and Price Sensitive Demand

Vertical integration, market foreclosure and quality investment

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