A constant price level facilitates cooperation among firms whereas steady inflation and deflation rates lower firms' ability to cooperate. In an experimental market with price competition we show that both inflation and deflation signicantly reduce cooperation compared to treatments with a...

The literature on the licensing of an innovation has mainly focused on some specific contract types. We show within the framework of a fairly general model that removing these contractual limitations will lead to extreme market outcomes. Specifically, we find that when the patentee can employ...