Profit Improving via Strategic Technology Sharing

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Title:	Profit Improving via Strategic Technology Sharing
Authors:	Kuo-Feng Kao;Cheng-Hau Peng
Keywords:	strategic technology sharing;successive monopoly;vertically-related markets;welfare
Date:	2016-05
Issue Date:	2016-11-25 02:11:21 (UTC+8)
Publisher:	Walter de Gruyter GmbH
Abstract:	his paper investigates whether a downstream monopolist has an incentive to freely share its technology to potential entrants. With a linear demand, it is more profitable for the downstream monopolist to share its obsolete technology with the potential entrants even with no returns. In this context, technology sharing is a Pareto improvement. Moreover, the profit of the downstream monopolist via technology sharing increases with the number of new entrants, but the nexus between social welfare and the number of new entrants is non-monotonic.
Relation:	The BE Journal of Economic Analysis and Policy 16(3), p.1321-1336
DOI:	10.1515/bejeap-2015-0202
Appears in Collections:	[Graduate Institute & Department of Industrial Economics] Journal Article

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