Collusion and dynamic (under‐) investment in quality
研究企业能否通过威胁增加投资来维持合谋下的质量投资不足均衡，发现无溢出时存在该均衡，强溢出时则不存在，且弱化专利保护可增加投资。
In a dynamic game of investment in product quality, I investigate whether collusive underinvestment equilibria can be supported by the threat of escalation in investment outlays. When there are no spillovers, underinvestment equilibria exist even though, by deviating, a firm can gain a persistent strategic advantage. When there are strong spillovers, underinvestment equilibria fail to exist. A weakening of patent protection can thus lead to more investment in equilibrium. A “nonfragmentation” result is shown to hold: in all free‐entry equilibria, industry concentration is bounded away from zero, no matter how large the market, and despite the existence of underinvestment equilibria.