The paper makes two related contributions. First, and in contrast with the rich body of literature on collusion with (mainly perfect) substitutes, it derives general results on the sustainability of tacit coordination for a class of nested demand functions that allows for the full range between perfect substitutes and perfect complements. Second, it studies the desirability of joint marketing alliances, an alternative to mergers. It shows that a combination of two informationfree regulatory requirements, mandated unbundling by the joint marketing entity and unfettered independent marketing by the firms, makes joint-marketing alliances always socially desirable, whether tacit coordination is feasible or not.
tacit collusion; cooperation; substitutes and complements; essentiality; joint marketing agreements; patent pools; independent licensing; unbundling; co-opetition;
- D43: Oligopoly and Other Forms of Market Imperfection
- L24: Contracting Out • Joint Ventures • Technology Licensing
- L41: Monopolization • Horizontal Anticompetitive Practices
- O34: Intellectual Property and Intellectual Capital
TSE Working Paper, n. 13-439, October 23, 2013, revised April 2017