License or entry with vertical differentiation in duopoly
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Masahiko Hattori [1] ; Yasuhito Tanaka [1]
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[1] Doshisha University
Doshisha University
Kamigyō-ku, Japón
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- Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 5, Nº. 1, 2016, págs. 17-29
- Idioma: inglés
- Enlaces
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Resumen
We consider choice of options for a foreign innovating firm to license its technology for producing the high quality good to a domestic firm, or to enter the market of the domestic country with or without license. Under the assumption of uniform distribution about taste parameters of consumers; when cost functions are linear, if the low quality good’s quality is sufficiently high, license without entry strategy is optimum; if the low quality good’s quality is low, both of entry without license strategy and license without entry strategy are optimum; when cost functions are quadratic, if the high quality good’s quality is high, license without entry strategy is optimum; if the high quality good’s quality is low, entry with license strategy is optimum.
