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Charla Yogesh Joshi, Professor of Marketing, U. of Maryland

Title: “Strategic Impact of Empowering Competitor Products”

Abstract:

We develop an analytical model to examine when a firm with superior technology is willing to share its technology with a competitor. Two competing firms are both horizontally and vertically differentiated. The higher-quality firm first decides whether to allow its lower-quality rival to use its technology to improve the latter’s offering, after which both firms engage in price competition. We analyze the implications of these decisions on market outcomes. First, the high-quality firm has to optimally balance market share reduction against financial gains from technology sharing; and in equilibrium its price and profit may increase. Second, the low-quality firm, willing to accept the technology, may expand its customer base and become more profitable despite payments made to the high-quality rival. Third, some consumers may benefit from the sharing due to expanded market coverage. We characterize the optimal R&D investment by the high-quality firm that determines the quality of its shareable technology, and we discuss how horizontal and vertical differentiation influence the equilibrium outcomes.

Charla del académico Yogesh Joshi, Profesor de Marketing de la Universidad de Maryland

Hora: 13:00

Dónde: Sala 401, Beauchef 851, Torre Poniente. Departamento Ingeniería Industrial.