Ch07_09_combo_present_Cho_Final

Reduce tacit collusion when firms in an industry

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Unformatted text preview: BlueRay vs. HD 1–47 Uncertainty­Reducing Strategy Complementary Alliances Competition Competition Response Alliances Response Uncertainty Reducing Alliances • Are used to hedge against Are risk and uncertainty. risk • These alliances are most These noticed in fast-cycle markets noticed • An alliance may be formed to An reduce the uncertainty associated with developing new product or technology standards. standards. • E.g. Hybrid fuel cells, E.g. Nanotechnology, AIDS drugs, 3g and 4g in telecom 3g 1–48 Competition­Reducing Strategy Complementary Alliances Competition Competition Response Alliances Response Uncertainty Reducing Alliances Competition Reducing Alliances • Created to avoid destructive or Created excessive competition excessive • Explicit collusion: when firms directly negotiate production output and pricing agreements in order to reduce competition (illegal). reduce • Tacit collusion: when firms in an industry indirectly coordinate their production and p...
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This note was uploaded on 04/28/2013 for the course MGMT 491 taught by Professor S.cho during the Spring '12 term at Washington State University .

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