Entry Deterrence Through Cooperative R&D Over-Investment

Abstract

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Team building and hidden costs of control

“…Corroborating this conclusion, we find that (only) CE agents reciprocate negative sensations; the marginal effect is 0.26, being significant at the 5 percent level (p = 0.040). In sum, we find pronounced treatment 38 We provide the results of negative binomial estimates in Table A.8 in Appendix A. 39 We find a significant interaction term in the corresponding negative binomial estimations in Table A.9. A rationale for this result is provided by the theory of intention-based reciprocity (for instance, Charness and Rabin, 2002; Dufwenberg and Kirchsteiger, 2004; Rabin, 1993).…”

“…To explore more rigorously how the agent's response to sensation differs by agent type we estimate multivariate OLS regressions. 38 The dependent variable is the agent's transfer to the principal beyond the latter's minimum requirement. As in Table 4, all regression models use demographic variables to control for individual heterogeneity.…”

Global Sourcing of Complex Production Processes

“…Finally, in this last step of the analysis, we introduce fixed costs which may differ according to the firm's organizational structure and the global scale of the production process. Starting from the total payoff as given in (38), fixed costs are introduced via the last term in the following expression which depends on ξ, O and V :…”