The Co-existence of Patent Pools with Uwe Walz R&R Review of Industrial Organization working version
Many industries, in particular high-tech industries, have experienced the (re-)emergence of patent pools that potentially co-exist with each other in the same technology. In this paper, we provide a theoretical framework which allows us to understand the main determinants of co-existing patent pools. We discuss the decision to create competing patent pools in the same technology against the background of the trade-off between decreasing returns to the pool’s size and a profit-reducing competition effect. We show that the co-existence of patent pools which serve vertically segmented markets is more likely to be observed within a larger patent universe that has substantial technological dispersion and more similar patents. Furthermore, we show that if the co-existence of pools emerges in equilibrium, then it always welfare dominates a common pool and sometimes even in the absence of pools altogether.
Bargaining and Competition - The Optimal Size of Buyer Groups with Uwe Walz working version
We investigate the formation of buyer groups in which downstream firms act together vis-à-vis upstream suppliers to negotiate sourcing prices while competing in downstream markets. Our analysis of the size of such buyer groups rests on the following trade-off. On the one hand, enlarging the size of the buyer group increases its bargaining power that leads to lower sourcing prices. On the other hand, for its members a larger buyer group means that more competitors in the downstream market benefit from lower sourcing prices. We show that forming a partial buyer group may be privately optimal. However, partial buyer groups are too small from a welfare perspective.
Carbon Border Adjustment Mechanism and Supply Chains with Uwe Walz working version
Carbon border adjustment mechanisms (CBAMs) attempt to restore the competitiveness of domestic producers and avoid carbon leakage. These policy measures often concentrate on CO2-intense, upstream industries. We use a model with vertical production structures and show that such policies may have unintended consequences even if the downstream domestic producer does not bear any additional costs. An upstream-only CBAM reduces foreign upstream demand, lowers its marginal cost, and strengthens foreign downstream competitors. Hence, such a policy harms the competitiveness of domestic downstream industries and increases overall CO2 emissions.
Innovation Races with Asymmetric Firms
Competing with an AI entrant - Rational and Optimal AI-Adoption with Ella-Maria Schirra