nep-ind New Economics Papers
on Industrial Organization
Issue of 2008‒01‒12
two papers chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Active firms in horizontal mergers and cartel stability By Emilie Dargaud
  2. Intellectual Property Rights and Competition Policy By Ganslandt, Mattias

  1. By: Emilie Dargaud (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: In this paper, we study the optimal number of active firms in a<br />coalition and in a merger. We consider two kinds of game : a merger game<br />and a coalition game, both in the context of price competition with horizontal<br />product differentiation. These are two-stage games. The first stage consists<br />of determining the number of active firms; the second stage is price competition<br />between active firms. Firms belonging to the same owner or to the<br />same coalition play cooperatively between themselves but face competition<br />between other firms.<br />We show that when there is no competitive pressure (i.e. no outside firm)<br />then only merged equilibria can occur in the merger case. In the coalition<br />case we obtain a similar result in which the number of active firms in the<br />second stage is less than the initial number of firms.<br />Moreover we show that if competitive pressure is high enough then the<br />initial number of firms in the industry is the same as the number of active<br />firms in the last stage for each kind of game.
    Keywords: Mergers ; Coalitions ; Product differentiation
    Date: 2007
  2. By: Ganslandt, Mattias (Research Institute of Industrial Economics (IFN))
    Abstract: Intellectual property rights and competition policy are intimately related. In this paper I survey the economic literature analyzing the interaction between intellectual property law and competition law and how the boundary between these two policies is drawn in practice. Recognizing that intellectual property rights and competition law can interact in many different ways, the presentation focuses on several key issues. The economic literature on the interaction between competition law and intellectual property rights shows that these regulatory systems are consistent in terms of basic principles. Significant tensions exist, however, and it is difficult to balance IPR and competition law in practice. The significant differences in approach between the United States and the European Union simply reflect the underlying reality that efforts to achieve a sensible balance do not result in policy harmonization.
    Keywords: IPR; Competition Policy; Antitrust Policy; Cross-licensing; Refusal to License; Patent Pools; Tying; Patent Litigation
    JEL: K21 L41 O31 O34
    Date: 2008–01–02

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