Spying in Multi-market Oligopolies
Data
18.09.2010
18.09.2010
Autori
Pascal Billand, Christophe Bravard, Subhadip Chakrabarti, Sudipta Sarangi
Codice JEL
C70, L13, L20
C70, L13, L20
Parole chiave:
Oligopoly, Multimarket, Networks
Oligopoly, Multimarket, Networks
Publisher
Climate Change and Sustainable Development
Climate Change and Sustainable Development
Editor
Carlo Carraro
Carlo Carraro
We consider a multimarket framework where a set of firms compete on two interrelated oligopolistic markets. Prior to competing in these markets, firms can spy on others in order to increase the quality of their product. We characterize the equilibrium espionage networks and networks that maximize social welfare under the most interesting scenario of diseconomies of scope. We find that in some situations firms may refrain from spying even if it is costless. Moreover, even though spying leads to increased product quality, there exist situations where it is detrimental to both consumer welfare and social welfare.