Technology spillovers and outside options in a bilateral duopoly

Matsushima, Noriaki; Zhao, Laixun

Institute of Social and Economic Research Discussion Papers, 2018, 1039, 1-27

Number of Access:298（2025-07-24 04:15 Counts）

Identifier to cite or link to this item: https://hdl.handle.net/11094/70130

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Title
Technology spillovers and outside options in a bilateral duopoly
Creator
NRID
1000080334879 1000080334879
ORCID
0000-0002-7865-3875 0000-0002-7865-3875
researchmap permalink
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Scopus Author ID
7005645778 7005645778
CreatorName
Matsushima, Noriaki
NRID
1000070261394 1000070261394
CreatorName
Zhao, Laixun
Subject
Strategic sourcing
Outside option
Spillovers
Vertical relations
Abstract
This paper examines the role of outside options in a downstream duopoly with exclusive vertical relations as in the Japanese automobile industry. In our setup, the downstream firms have outside options, and two upstream firms with exclusive relations can engage in cost reducing investments. More interestingly, each upstream firm can choose whether to voluntarily generate technology spillovers to its rival. We show that better outside options of the downstream firms can induce voluntary technology spillovers in the upstream level, increasing the profits of all firms on the vertical chain.
Publisher
The Institute of Social and Economic Research, Osaka University
Source Title
Institute of Social and Economic Research Discussion Papers
Volume (Issue)
1039
Page
1-27
Date of Issued
2018-08-06
Language
English
Handle URL
https://hdl.handle.net/11094/70130
Relation.references
URI
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2018/DP1039.pdf
Access Rights
metadata only access
Category
ディスカッション／ワーキング・ペーパー DP/WP
Institute of Social and Economic Research Discussion Papers