Private regulation to appropriate value from design innovations: Implications for anti-trust policy

Abstract

Co-operative ventures among rivals are looked upon in general with suspicion by anti-trust authorities. In this paper, we position ourselves in the school of thought that evaluates collusive behavior among rivals with the Schumpeterian concept of dynamic competition in mind rather than the concept of Neoclassical perfect competition. We argue that whenever firms have difficulty in appropriating sufficient returns from their innovations, certain forms of apparently collusive behavior-or, more precisely, 'private regulation'-may actually stimulate investment in innovation and thereby Schumpeterian competition. A study of firms' strategies to appropriate value from design innovations in the Dut..