Under constant returns to scale the only justification for joint ventures are externalities from knowledge spillovers. In a two-stage game we compare the incentives for integrated cartels and cartels with downstream competition. The externalities introduce an underinvestment incentive. Under...

Tying contracts are well-known for their anti-competitive potential. This paper questions their negative image by showing that tying contracts can be necessary to implement price signals which overcome problems of asymmetric information in the introductory phase of a new durable product. The...

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