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R&D Cooperation And Collusion: The Case Of Joint Labs

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  • MARIE-LAURE CABON-DHERSIN

Abstract

In the standard two-stage framework of R&D/product market competition, the present note compares the performance of full cooperation (firms conduct R&D in a joint lab and collude in the product market) and full competition (firms compete in R&D as well as in the product market). The paper shows that (i) full cooperation leads to better results in terms of R&D efforts compared with non-cooperation; (ii) collusion at the production stage may increase both producers' and consumers' surplus especially when the degree of spillovers is not too high and the products are not homogeneous; (iii) the gains in terms of social welfare from full cooperation increase when the efficiency of R&D decreases. Copyright � 2008 The Author. Journal compilation � 2008 Blackwell Publishing Ltd and The University of Manchester.

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Bibliographic Info

Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 76 (2008)
Issue (Month): 4 (07)
Pages: 424-435

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Handle: RePEc:bla:manchs:v:76:y:2008:i:4:p:424-435

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