International audienceWe analyze the impact of the private label production channel on innovation. A retailer may either choose to integrate backward with a small firm (insourcing) or rely on a national brand manufacturer (outsourcing) to produce its private label. The trade-off between insourcing and outsourcing strategies is a choice between too much or too little innovation (i.e., quality investment) on the private label. When insourcing, an outside-option effect leads the retailer to overinvest to increase its buyer power. When outsourcing, a hold-up effect leads to underinvestment. In addition, selecting the national brand manufacturer may create economies of scale that spur innovation

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractUnder imperfect competition, the eect of a cap-and-trade system on industry prots depends on the type of abatement technology that is used by rms: industries that use process-integrated technologies are more aected than those using end-of-pipe abatement technologies. The interaction between environmental policy and the evolution of the market structure is then studied. In particular, a reserve of pollution permits for new entrants is justied when the industry uses a process-integrated abatement technology, while a system with a preemption right may be justied in the case of end-of-pipe abatement technology.JEL Classication: L13, Q53, Q58.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editor. Terms of use: Documents inEntry Deterrence Through Cooperative R&D Over-InvestmentClémence Christin * November 2011 AbstractIn this paper, we highlight new conditions under which R&D agreements may have anti-competitive eects. We focus on cases where two rms compete with each other and with a competitive fringe. R&D activities need a specic input available to all rms on a common market, the price of which increases with demand for the input. In such a context, if a rm increases its R&D expenses, it increases the cost of R&D for its rivals. This induces exit from the fringe and may increase the nal price. Therefore, by contrast to the case where the cost of R&D for one rm is independent of its rivals' R&D decisions, cooperation between strategic rms on the upstream market may induce more R&D by strategic rms, in order to exclude rms from the fringe and increase the nal price.JEL Classications: L13, L24, L41.

No abstract

The availability of a new product in a store creates an informative spillover that extends past the store itself through word‐of‐mouth advertising. Because of this spillover, each retailer is able to extract a slotting fee from the manufacturer at product introduction. Slotting fees may discourage innovation by the manufacturer and, in turn, reduce consumer surplus and social welfare. A manufacturer is more likely to pay lower slotting fees when it can advertise more heavily, or when it faces a larger buyer. These results are robust to variations in retail competition, firms’ discount factors, and the identity of the innovating firm.