The theoretical literature on industrial organization has been argued that firms hold excess capacity to deter entry. However, empirical analysis did not provide much support to this hypothesis. In this paper we show that the dominant firms may hold excess capacity not for entry deterrence but...

The literature on technology licensing has ignored the importance of market power of the input supplier. In this paper we examine the impact of licensing in the downstream industry when the firms in the upstream industry have market power. We show that licensing in the downstream industry can...

This paper compares profits and consumer surplus under non-cooperation and collusion in the product market when the firms have the option for R&D before production. We show that whether R&D investment would be higher under non-cooperation or product market collusion depends on the R\&D...